Finance for ecommerce businesses
There are many different types of ecommerce lending products that will suit ecommerce business owners from merchant cash advances to asset finance. Deciding what's best for you will depend on the type of business and industry in which you trade.
Benefits of an e-commerce business loan
There are many advantages to securing an ecommerce loan, and they include the following:
Preserving cash reserves
You might be torn between using some cash you have saved up to get what you need to run your business, yet with so much uncertainty in the market, business owners are turning to alternative funding options, rather than dipping into cash reserves.
Fixed repayments
Repayments are fixed and affordable.
Growth
You use your cash to expand your business.
Online process
Entire process can now be done online.
Keep equity
Won’t need to sell part of your business to raise money.
Trusted advisors
Trusted advisors will talk you through the process from start to finish.
How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
Get quotes instantly
Our smart technology will compare quotes from up to 120+ lenders to help you find the ideal business loan.
Apply for a Business Loan 🎉
We'll be there to guide you through every step of the process.
Trusted by over 21,118 customers
Types of ecommerce lending products?
Business finance facilities
In a utopian business world, business owners would always have enough cash for purchases, however, in reality, most expenses for web-based businesses are done through business finance facilities such as merchant cash advances, invoice financing, business loans, and asset finance.
Merchant cash advances
One of the latest funding options available to ecommerce businesses including online retail businesses are merchant cash advances. This is a handy source of cash that is based on monthly average card transactions done via your card payment terminal. The cash advance plus a fixed fee is payable as an agreed percentage of daily credit/debit card sales for the duration of the loan period.
Invoice financing
Another type of financing used by web businesses is invoice financing, where the business owner offers up unpaid customer invoices as security, which gives the business access to cash based on a percentage of the total invoice value — can be as quick as 24 hours to complete. Like with all other types of business loans, the amount of money on the cards is dependent on the lender's risk assessment.
Business loans
One of the most popular types of lending is the classic business loan, which comes as either a secured business loan or an unsecured business loan, and it’s important to know the differences between the two, the main one being the use of collateral in the form of assets, which can allow the borrower to loan higher sums of money with better terms and interest rates.
Asset finance
Asset finance can make life easier for online businesses to buy, use, and benefit from valuable assets without having to make a large upfront cash payment, instead you can pay a fixed monthly amount to better manage cash flow. Many businesses will be familiar with equipment leasing and hire purchase, as these are the most popular types of asset finance for online companies. The big advantage of asset finance is that the responsibility for maintenance lies with the lender, at the end of the contract, you can return the machine/equipment to the lessor or take full ownership of the asset.
How much can you afford to borrow?
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
Monthly payments
-
Monthly interest
-
Total interest
-
Length of loan
-
Total cost of loan
-
Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
What is ecommerce financing?
Ecommerce business
If you operate an online company that sells products or services on the web, you own an ecommerce business.
Working capital
And, if you plan to grow that business, at some point you will need to look at funding options for working capital, new equipment, machinery, or if you plan on opening a new premises.
Finance
That’s where ecommerce finance comes into play.
How do I apply?
Registered business
If your business has a website and you receive payments for products or services you are eligible to apply for ecommerce financing. Direct-to-consumer businesses, online retailers, Software as a Service, and online marketplaces are all eligible for ecommerce finance. However, if you are not one of the above, you may still be able to secure a merchant cash advance or a regular business loan. The business will need to be registered in England or Wales to satisfy most lenders’ eligibility criteria for ecommerce finance.
Trading history
You must own a limited company or sole tradership, have a trading history of 12 months+ (depending on the lender this can vary), and on average you transact more than £10,000 a month through your business bank account (again this may vary from lender to lender.)
Quickly compare offers
One additional perk of using a lending platform to find the best deal is the ability to quickly compare offers from different lenders, without having to spend days doing this manually. You can focus on running your ecommerce business while a lending platform does this automatically using an algorithm, bypassing the need for a middleman like a credit broker.
What can I use the money for?
Multipurpose
The great thing about ecommerce loans is that they are multipurpose. Business owners can use the capital for marketing, stock, repairs, purchases, legal fees, working capital or any other expense that is related to trading. It will depend on the lender, but most don’t dictate how the money should be spent, however, bear in mind that guarantees and indemnities may be required.
Scan the market
With the help of a lending platform like Funding Options, you can quickly scan the market to find the most suitable ecommerce financing option for your business. They can introduce applicants, figure out ways to improve your credit score, or negotiate on your behalf in respect of stipulations like personal guarantees and collateral.
Many options
You could use an e-commerce business loan in the following ways: to buy new stock, for marketing and advertising, to manage cash flow, to investing in new technology, for storage facilities including migration to cloud computing.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
