Online companies need funding just like any other business. Knowing where to secure financing for your e-commerce business is crucial. We’ll cover two e-commerce funding routes you could take: business loans and e-commerce grants.

There are several factors to consider when looking for the ideal financing for your business. Ask yourself:

  • When do you need the money? Some lenders can process your application in as fast as 1 business day. Others may take longer.
  • How much do you intend to borrow? The lender sets the amount you’re allowed to borrow. It’s all based on a number of factors including your ability to pay them back. Some lenders also set a cap regardless of whether you can return the money on time.
  • Do you have a strong financial history? Lenders will ask for proof of your ability to pay. So you need to have a strong financial history. If you don’t, you still have options though not as many.
  • How do you intend to use the money? Some lenders will ask what you will use the money for. Other options won’t require you to do so. But it’s a good idea to have an answer in mind when you go through the application process.

E-Commerce Business Loans: Where to Find Them

Identifying which loan type should help you find the best and most applicable approach for you.

Banking Business Loans

A bank loan is often the first option entrepreneurs explore when they need quick access to working capital.

Unfortunately, it can be difficult to qualify for this type of loan. According to a February 2018 article in the Washington Post, big banks had an approval rate of 25% for small business loans.

There are different types of e-commerce small business loans you could apply for:

  • Term Loans —With this type of business loan, you seek for a specific amount and pay it back over an agreed-upon time period. To qualify for this type of loan, you’ll likely need to provide a personal guarantee.
  • Business Lines of Credit — This type of loan is different from a term loan. The bank provides you a pool of cash that you can withdraw anytime you need it. You only pay interest for the amount you take out.
  • Equipment Loans — If you need to buy business equipment or vehicles, then you can apply for an equipment loan. The bank will finance a part of (or the entire) purchase. The bank will use the equipment itself as collateral so there’s no need to provide a personal guarantee.

Banks also can provide 2 other types of financing. They are business credit cards and SBA loans.

With invoice financing, the customer invoice itself acts as the collateral for the lender.

Invoice Financing

This kind of financing can fill the gap caused by customers who are unable to pay for your products or services on time. With invoice financing, the customer invoice itself acts as the collateral for the lender.

When customers purchase from you on credit, you can ask a lender to pay for the money owed by the customer so you can invest it to back your business.

It’s important to note that it’s unlikely the lender will give you the full amount. Only after the buyer pays for the invoice will the lender give you everything you’re owed. For their service, you pay the bank interest and other fees.

BlueVine Capital is a company that provides invoice financing. The lender provides up to 90% of the amount owed by the buyer. You get the full amount after the customer pays the invoice. It can take as little as 24 hours to process and approve applications. However, the company requires that you have a FICO of 530 or more, have been in business for at least 3 months, earn at least $10,000 a month and that run a business-to-business company.

SBA Loan

The Small Business Administration (SBA) helps small businesses get loans through their lending partners.

Here’s how it works:

  1. Tell the SBA what you’ll use the money for. After 2 days, you’ll receive an email that’s filled with interested lenders who’d want to work with you. You can take this time to talk to each lender to compare rates and terms.
  2. Once you’re able to pick a lender from the bunch, you can submit your paperwork and other requirements to the lender.

Applicants need to have the following information ready before proceeding:

  • Business plan
  • Amount needed
  • Credit history
  • Financial projections
  • Collateral
  • Industry experience

The SBA is a federal government-run program that uses federal funds to guarantee part of the loan that’s given out by the lender. That’s why banks are more likely to approve SBA loans.

It isn’t easy to qualify for an SBA loan. You must have a solid financial track record to have a shot at getting approved.

Business Credit Card

A business credit card is another popular option because entrepreneurs can use the funds as they see fit.

Business credit cards work just like a personal credit card. However, business credit cards usually have perks and features that make it more beneficial for entrepreneurs to use.

You can use a business credit card to build up your credit score which is useful especially if you plan to apply for a business loan in the near future.

Popular business credit cards include the American Express Blue Business Plus Credit Card and the Chase Ink Business Cash Credit Card.

Both cards offer an introductory rate of 0% annual fee. You can ask for employee cards so your team can make company purchases on your behalf.

Other banks that offer business credit cards featuring a variety of perks. Think about your company’s needs and see which banks have cards that match your requirements.

You can use a business credit card to build up your credit score which is useful especially if you plan to apply for a loan in the future.

Purchase-Order Financing

Purchase-order (PO) financing is exactly as it sounds: Lenders would give you capital so you can deliver the goods that your customers have ordered.

This is best suited for scenarios where you get an influx of orders but lack the resources to fulfill them.

The application process for PO financing is almost the same for every lender. After you receive your purchase order from the customer, you can place an order with your supplier. The lender will then provide the supplier with a letter of credit. That’s when the supplier delivers the goods to you so you can fulfill your customer’s order.

After you’re paid by your customer, you can pay back the lender what you owe plus fees or interest.

Grants for E-Commerce

If you don’t want to apply for a loan, here’s another way of how to get funding for your e-commerce website: Apply for a business grant.

One downside is that e-commerce grants are scarce. You’d have to do your research to find the right grant.

There is good news, however. Since the U.S. government is encouraging women and minorities to start their own businesses, there are grants that are specifically designed for these parties.

There also are grants that aren’t as specialized. FedEx, for instance, has its Small Business Grant Contest that anyone can enter so long as you meet the requirements such as having less than 99 employees and being in operation for at least 6 months by the time the contest starts.

There are 10 winners overall. The grand prize winner will receive $50,000 and $7,500 in FedEx Office print and business services. Competition is fierce, however. In 2019 alone, the FedEx grant competition saw over 13,000 candidates submit applications to join.

You also can search for opportunities on

There you can use the filters to find grants that apply to your business category.


Crowdfunding has proved instrumental in launching certain small businesses.

Finding the right crowdfunding platform is the key. Kickstarter, for example, gears more toward technology and publishing. There are platforms that specifically focus on launching businesses. Go Fund Me, for instance, has a business fundraiser section where entrepreneurs can present their business plan to the public and wait for people to donate.

There’s no guarantee that you’ll meet your goal. You may need to promote your project to get eyes on your campaign. But if you have an innovative idea and can present your business properly, this could be a viable option to raise funds for your e-commerce business.

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