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E-Commerce Business Loans: Best Options for Online Stores

While e-commerce businesses typically have fewer startup and ongoing costs than brick-and-mortar stores, many business owners may need financial assistance to start or grow an ecommerce website. Luckily, a loan for your e-commerce business can help.

Best E-Commerce Business Loans
Lindsay Frankel
Written by:Lindsay Frankel
Personal Finance Expert

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

Fact Checked by: Dr. JeFreda R. Brown, Financial Expert

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Whether you’re just starting an e-commerce business or you’re looking to expand, an e-commerce business loan can help cover your costs. Costs for e-commerce businesses include dropshipping, reselling items, manufacturing products from raw materials, hiring staff, marketing your business, and daily operating expenses. Existing e-commerce businesses often need funding to grow or expand.

Our experts reviewed and ranked the best e-commerce lenders for every type of small business need, so you can get the funding that’s best for you.

E-Commerce Business Loan

Top Picks for Best E-Commerce Business Loans

  • Lendzi - Best for Businesses With High Revenue
  • Backd - Best for Cheapest Interest Rates
  • National Funding — Best For Ecommerce Working Capital
  • Bluevine — Best for Ecommerce Startup Loans
  • SMB Compass - Best Variety of Business Loans
  • Biz2Credit — Best for Ecommerce Inventory Financing
  • Uncapped — Best for Revenue-Based Financing

When comparing funding for e-commerce businesses, it’s important to consider various factors. In this review we highlight the terms, rates and fees of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best small business loan for your needs.

 

Best E-Commerce Business Loans - Full Overview

Best Overall
Lendzi logo
4.5

Lendzi - Best for Businesses With High Revenue

4.5
Factor Rate
Starting at 1.10
Loan Amounts
Up to $4 million
Min. Annual Revenue
$180,000
Key Features
  • Borrow up to $4 million in working capital
  • Min. credit score: at least 500
  • Min. time in business: 6 months
  • Equipment financing up to $2 million
  • Business line of credit up to $250,000
  • See your options without hurting your credit
  • Flexible terms: 3 to 15 months
  • Excellent customer reviews on independent review sites
  • Get funding in as little as 24 hours
Pros & Cons
  • Easy only application
  • Bad credit accepted
  • Competitive rates
  • Excellent 5-star customer ratings
  • Flexible terms
  • Many options to choose from
  • Interest rates may be high for those with poor credit
  • Annual income requirements can be high
Overview

If you’ve previously been denied a loan for your ecommerce business, don’t let that stop you from giving Lendzi a chance. Lendzi was founded in 2020 and caters to borrowers with high revenue who have been denied a business loan elsewhere. They are a direct lender in addition to partnering with more than 75 other lenders, increasing your odds of qualifying for a loan.

 

Main Features

Lendzi’s working capital loans are up to $400,000 and range from three to 15 months, with factor rates starting at just 1.15. The credit score requirement for this type of funding is just 500, making this the ideal type of loan for ecommerce businesses that have been denied a loan due to poor credit.

If credit is not your issue, Lendzi offers six other types of small business loans, including equipment financing, merchant cash advances, short- and long-term loans, business lines of credit, and SBA loans. Applying takes just a few minutes online, and once you submit your application a representative will give you a call. To qualify, you should have a business history of at least six months and $180,000 or more in annual revenue.

Lendzi is worth looking into if you have bad credit, have been denied a loan previously, or just want a solid company to work with. They have over 2,000 5-star reviews on sites like Google, TrustPilot, and Better Business Bureau. Whether you need a small loan to cover additional marketing expenses or you need a large loan to invest in growth, Lendzi can help.
Backd business loans
4.5

Backd - Best for Cheapest Interest Rates

4.5
Factor Rate
Starting at 1.10
Loan Amounts
Up to $2 million
Min. Annual Revenue
$200,000
Key Features
  • Borrow up to $2 million
  • Min. Credit Score: 640
  • Min. Time in Business: 2 years
  • Industry best factor rate for MCA - as low as 1.10
  • APR for the Line of credit product starts at 35%
  • Flexible repayment terms up to 16 months
  • Get funding in as little as 24 hours
  • Check your rate with a soft credit pull
Pros & Cons
  • Easy online application
  • Fast lending decisions
  • Funding within 24-48 hours of loan approval
  • Large loan amounts up to $2 million
  • Must be in business at least one year
  • Rates not disclosed prior to applying
Overview

Backd was founded in 2018 and has since funded more than 10,000 small businesses, including those in ecommerce. Backd understands that obtaining funding through traditional banks can be a hassle and time-consuming, so they’ve made sure to make the process as quick and seamless as possible with the hopes of getting more businesses the funding they need. So far, they’ve succeeded and continue to help small businesses prosper.

 

Main Features

Backd offers two products: working capital loans and business lines of credit. Working capital loans range from $10,000 to $2 million with terms up to 16 months. This type of loan is best for ecommerce businesses who have a one-time expense and are able to pay back the loan quickly. A business line of credit, on the other hand, is for those that want access to funds for an unlimited period of time. There are no terms, and you can borrow up to $750,000. To qualify for either option, you need to be in business for at least two years, have $300,000 or more in annual revenue, and 640+ FICO score.

Backd has an easy online application, gives an instant lending decision, and can get you the funds you need within two days of loan approval. If you’re looking for a loan amount up to $2 million, Backd is worth looking into.
nationalfunding
4.1

National Funding - Best For Ecommerce Working Capital

4.1
Factor Rate
Starting at 1.10
Loan Amounts
Up to $500K
Min. Annual Revenue
$250,000
Key Features
  • Min. Time in Business: 6 months
  • Min. Credit Score 600
  • Borrow up to $500,000 in working capital
  • Equipment financing up to $150,000
  • Factor rate From 1.10
  • Fast funding
  • Early payment discounts
  • Equipment financing repayment 2-5 years
  • Working capital repayment 4 months - 2 years
Pros & Cons
  • Fair credit accepted
  • No risk to apply
  • Funding in as little as 24 hours from approval
  • Positive reviews
  • Early repayment discount
  • Available in all states
  • Daily or weekly repayments
  • Expensive rates and fees
  • Lack of transparency
  • High annual income requirements
Overview

If you need to cover day-to-day expenses, a working capital loan from National Funding can be a good fit. You may use the proceeds for payroll, platform payments, permits and licenses, and anything else you need to run your e-commerce store successfully.

 

Main Features

National Funding’s short-term working capital business loans range from $5,000 to $500,000 with repayment terms between four months and two years. The pay rate starts at 1.10. For a chance at approval, you’ll need a credit score of at least 600, a business history of six months, and $250,000 or more in annual revenue. If you pay your loan in full within 100 days, you’ll receive a 7% discount on your balance.

A working capital loan from National Funding might make sense if you have fair credit but want to borrow up to $500,000 to cover your daily expenses. This is especially true if you can afford to pay it back on a daily or weekly basis.
bluevine
4

Bluevine — Best for Ecommerce Startup Loans

4
Interest rates
Starting at 6.2%
Loan Amounts
Up to $250,000
Min. Annual Revenue
$480,000
Key Features
  • Funding up to $250,000
  • Min. credit score: 625
  • Min. time in business: 6 months
  • Interest rates as low as 6.2%
  • Loan Repayment 6-12 months terms
  • Quick and simple application
Pros & Cons
  • Quick and easy online application
  • Same-day or next-day funding
  • No monthly fees or prepayment penalties
  • Rates as low as 4.8%
  • Access to more funds with positive repayment
  • Dedicated account representative
  • Excellent independent customer reviews
  • Restrictive eligibility criteria
  • Not available in all states
  • Mixed mobile app reviews
Overview

Bluevine offers credit lines up to $250,000 with quick approvals, low starting rates, and no monthly fees or prepayment penalties. Bluevine is a great fit for creditworthy business owners who need ongoing access to funds. E-commerce business owners who don’t want to apply for new credit every time they need it, such as those who need capital for new product drops, may find Bluevine’s line of credit meets their needs.

 

Main Features

Bluevine offers lines of credit from $5,000 to $250,000 with simple interest rates starting at 4.8%. With a Bluevine line of credit, you can draw funds as needed and repay in fixed monthly or weekly payments over six or 12 months. Interest rates will likely be lower than a business credit card and you can borrow more at a time.

To be eligible for a line of credit from Bluevine, you must have a personal credit score of at least 625, at least six months of business history, and at least $10,000 in monthly revenue. As you make payments, you’ll build business credit and gain access to more funds.

Bluevine is ideal for e-commerce businesses that have ongoing funding needs or cash flow issues and need quick access to cash. Online retailers will appreciate the low rates, fast funding, and great customer service that Bluevine offers.
SMB Compass
4.5

SMB Compass - Best Variety of Business Loans

4.5
Interest Rates
Starting at 7.99%
Loan Amounts
$10K - $10 million
Min. Monthly Revenue
$20,000
Key Features
  • Loans up to $10 million
  • Min. credit score: can go as low as 550 for certain loans
  • Min. time in business: 1+ years in business, no startups
  • Funding times: 5 to 7 days for term loans and 24 - 48 hours for line of credit
  • Flexible terms: 2 – 10 years for term loans
  • Interest Rates: starting at 8.99% for term loans
  • Applying does not impact credit score
  • Nine loan products to choose from
Pros & Cons
  • Low, competitive rates
  • Large loan amounts
  • Loan terms up to 25 years
  • Excellent customer service
  • Poor credit not accepted
  • Not available in all states
  • Must be in business at least one year
  • High revenue requirements
Overview

Running an ecommerce business can be less expensive than brick-and-mortar businesses, but there are still many expenses that come with the territory. If you are in need of financing for your ecommerce business, SMB Compass can help. The lender offers nine different types of loans, including SBA loans, lines of credit, business term loans, equipment financing, invoice factoring, and more. Customer service is excellent and representatives are available to help you choose a loan and walk you through the process. To qualify, you need a credit score of 650, at least one year of business history, and $20,000 or more in monthly revenue.

Main Features

SMB Compass offers nine different types of small business loans to borrowers, including those in the ecommerce business. Their mission is to make loans more accessible to small business borrowers by providing cost-effective and flexible lending solutions. SMB Compass business loans range from $10,000 to $10 million with terms up to 25 years. Rates start at 7.99% for qualified borrowers. The lender has currently provided more than 1,200 U.S. businesses with more than $250 million in financing. To apply, simply fill out their easy online application. It takes just a few minutes and will not impact your credit score. If approved, funding can be dispersed within 24 hours.

SMB Compass is ideal for ecommerce business owners with decent credit scores and high monthly revenues. If you meet the strict qualifications, the lender can be incredible to work with. Rates are competitive, loan amounts are high, terms are flexible, and customer service is ranked “excellent.” Applying takes just a few minutes and, if approved, funding happens within one to two business days for most products. Contact SMB Compass to get started today!
biz2credit review
4

Biz2Credit — Best for Ecommerce Inventory Financing

4
Interest rates
Starting at 7.99%
Loan Amounts
$25K to $500K
Min. Annual Revenue
$250,000
Key Features
  • Working capital up to $2 million
  • Term loans up to $500,000
  • Term loan interest rate starts at 7.99%
  • Loan Repayment 12-36 months terms
  • Variable APR depending on the applicant
  • Funding in 72 hours
  • Soft credit pull
Pros & Cons
  • Quick and easy online application
  • Extended customer support hours
  • Fast funding within 72 hours
  • Flexible repayment schedule
  • High borrowing limits up to $2 million
  • Excellent independent customer service reviews
  • $250 to $400 closing fee
  • Not available to new businesses
  • Difficult to know rates before applying
  • Not available in all states
Overview

Biz2Credit connects you with lenders that offer working capital funding for e-commerce businesses and term loans that can be used for a variety of business needs. It’s best for businesses with at least six months of history that need more than $25,000 in working capital.

 

Main Features

With Biz2Credit, you can borrow anywhere from $25,000 to $2 million in working capital funding or up to a $500,000 term loan. Term loans have a 12- to 36-month term with simple interest starting at 7.99% plus an origination fee, while working capital loan terms and rates vary by lender.

You can repay daily, weekly, or bi-weekly. Most customers who are approved for working capital have at least six months of business history, annual revenue above $250,000, and a minimum 575 credit score. Most customers who are approved for a term loan have at least 18 months in business and a minimum 660 credit score.

With a short turnaround for funding and high borrowing limits, Biz2Credit makes it easy to get the funding you need quickly. The broker is best for existing businesses that need a lot of working capital to expand.
Uncapped - Fast, flexible funding for your online business
4.1

Uncapped — Best for Revenue-Based Financing

4.1
Revenue Share Rate
5% to 25%
Loan Amounts
Up to $10 million
Min. Annual Revenue
$600,000
Key Features
  • Borrow up to $10 million
  • Flat fee instead of interest rate for term loans: 2% - 12%
  • Revenue-based financing: 5% -25% revenue share rate
  • No minimum credit score
  • No personal guarantees required
  • Best for online businesses
Pros & Cons
  • No personal or corporate guarantees
  • No hidden costs
  • Revenue-based financing available
  • Borrow up to $10 million
  • Free accounting tools included
  • Unlimited virtual cards for payments
  • Not available in select states
  • Not available to sole proprietors
  • Must have at least 6 months in business
Overview

Uncapped has developed a loan product that is conducive to e-commerce businesses. In fact, the lender only works with businesses with an online model. You can choose either fixed-term or revenue-based financing, which helps protect you from unaffordable payments.

 

Main Features

You can borrow between $10,000 and $10 million from Uncapped to grow your e-commerce business. Instead of charging interest, the lender charges a flat fee as a percentage of the loan amount, which ranges from 2% to 12%. There are no other costs, such as origination fees or prepayment penalties.

You can choose to repay the loan in fixed installments over three to 24 months, or you can repay between 5% and 25% of your monthly sales until the principal and fee have been repaid. There’s no minimum credit score required, but you’ll need to have at least six months in business and earn $10,000 or more in monthly revenue to be eligible.

E-commerce businesses with fluctuating monthly sales will find the lending model at Uncapped especially appealing. If you’re looking for a fixed-term loan, however, be sure to compare the total cost of borrowing with more traditional business loans.

Main Features of the Best E-Commerce Business Loans

Lendzi4.5
Backd4.5
National Funding4.1
Bluevine4
SMB Compass4.5
Biz2Credit4
Uncapped4.1
  • Min. Credit Score - 500
  • Min. Time in Business - 6 months
  • Min. Annual Revenue - $180,000
  • Loan Amount - Up to $400,000
  • Interest Rate - Factor rates starting at 1.15

How to Choose the Best E-Commerce Business Loans

  • Loan Features: Features include loan amounts, interest rates and fees, and loan terms.
  • Application Process: Evaluate the ease of the application process and how long it will take to get funding for your e-commerce business.
  • Interest Rates and Fees: Aim for the lowest APR and the fewest fees you can qualify for based on your creditworthiness.
  • Qualification Process: Look at the credit score requirements for your business loan, along with the annual revenue and business history requirements to make sure you qualify before applying.
  • Online User Reviews: Check sites like Trustpilot for independent customer reviews of the lender you are considering, and make sure that the quality of their customer service meets your expectations.
  • Perks and Bonuses: Consider perks and bonuses like savings opportunities, payment flexibility, and advertising transparency.

E-Commerce Business Expenses

Even though e-commerce businesses operate online, there are still expenses that come with running one. Possible business expenses include:

  • E-Commerce website: This includes the domain name, hosting, and CRM software. This can range from a few hundred per year to over $6,000 if you opt to use a designer.
  • Staff: Staff may include employees to help create and ship your product, web developers, marketing and social media specialists, customer service representatives, and more.
  • Insurance and fees: Each state may have different rules regarding e-commerce business operations and permits, and the fees will vary depending on the type of business you run and the state you live in.
  • Inventory and warehouse space: If you’re selling a product, you’ll need inventory. If it’s a large product, you may also need to finance a warehouse.
  • Marketing and advertising: This includes running ads on sites like Google and Facebook, direct and local marketing, hosting giveaways, attending networking events, and more. Most small businesses spend 7-12% of their revenue on marketing.
  • Platform fees: You’ll pay fees on the platforms you sell your products, such as Amazon, eBay, or Shopify.
  • Returns and refunds: Some customers won’t like the product and will send it back; others may receive a broken item and want a replacement. Unfortunately, returns and refunds are more of an expense that most e-commerce business owners realize.

Bottom line: you can expect to spend anywhere from a few thousand dollars to upwards of $200,000 or more per year on building and maintaining your website, hiring staff, purchasing equipment and inventory, and paying for marketing and advertising.

How Does E-Commerce Financing Work?

E-commerce business funding works similarly to other types of small business loans. The financial lender delivers an agreed-upon amount of capital to a qualified e-commerce company and charges interest and service fees to the borrowing company. Under the terms of the loan contract, the borrower repays the lender on a fixed basis (usually every 15 or 30 days) until the loan is fully repaid.

Before delivering the small business loan, the lender will vet the business and financial credentials of the e-commerce company, including credit history, annual revenue, and length in business. Once approved for the loan, the lender disperses the money as soon as the next business day.

 

How to Qualify for E-Commerce Financing

While qualifications for e-commerce financing will vary between lenders, you can typically expect you’ll need to meet the following minimum requirements:

  • 600 minimum credit score
  • 6+ months in business
  • $100,000 in annual revenue

Of course, some lenders will accept lower credit scores and have lower monthly revenue threshold requirements. The higher your credit score and stronger your business credentials, though, the less you’ll pay in interest rates and fees.

Here are 8 ways you can build your business credit >>

 

How to Apply for a Loan for an E-Commerce Business

Once you decide on a lender, you’ll fill out an initial application. Typically, these take just a few minutes to complete and you’ll receive a preliminary decision shortly upon submitting.

If the lender approves you initially, you’ll be asked to submit some business financials, including:

  • Your business tax ID
  • Personal and business tax returns
  • Bank statements
  • Collateral, if required
  • Legal documents, such as business licenses or leases

If additional paperwork is needed throughout the process, the lender will contact you. Once everything is submitted and approved, you can expect funds to be in your account within 24 to 72 hours.

 

Alternatives To E-Commerce Business Loans

Traditional financing options include term loans and lines of credit, mentioned above. However, there are other avenues you can explore, too, such as:

  • Microloans: These loans range from $1,000 to $50,000. If your business needs are modest, a microloan lender can seal the financing deal.
  • Peer-to-peer loans: Peer-to-peer financing platforms have grown substantially as digital lending has gone mainstream. For companies just starting out and who don’t need large amounts of financing, peer-to-peer lenders are well worth a closer look.
  • SBA loans: SBA loans are backed by the Small Business Administration and come with lower interest rates and better terms than traditional term loans. The paperwork process can be lengthy, but if you’re in no rush, the SBA is open to financing small businesses.

 

Conclusion

E-commerce business owners who need the funds to start or expand their business have a variety of online options to choose from. Funding times are quicker than traditional banks, and eligibility requirements are often less strict. If you need capital quickly, apply with one of the lenders recommended above so you can get back to focusing on your business.

 

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

Lindsay Frankel

Written by: Lindsay Frankel

Personal Finance Expert

Personal finance expert with 3 years experience specializing in researching, writing, and editing insurance, loans, and credit cards content.

More about me
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me
Dr. JeFreda R. Brown-Xaris Financial Enterprises

Fact Checke by: Dr. JeFreda R. Brown

DBA, CFEI and a highly respected expert in personal and business finance

Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal...

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