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Best Ecommerce Business Loans of 2022

Becky Hanson

Ecommerce business loans can help start your online operations, or grow your business to new levels by using extra cash flow to enhance your digital storefront, financing inventory, and paying for other expenses to meet demand. We’ve evaluated the best e-commerce business loans based on loan terms, fees, rates, customer satisfaction, and overall quality.

Quick approvals with fast funding process

$6,000,000

Max. Loan Amount

12+ months

Time In Business

$10,000+

Monthly Revenue

650

Min. Credit Score

Overview

Biz2Credit provides a fast application process that can take less than 4 minutes and provide funding within 72 hours.

What we like

  • Fast funding process
  • Funding advisors available
  • Various repayment options
  • Large funding amount

What we don't

  • Origination fee
  • Maximum term of 36 months
  • Business assets required

No prepayment and origination fees

$250,000

Max. Loan Amount

12+ months

Time In Business

$3,000+

Monthly Revenue

640

Min. Credit Score

Overview

If you require cash quickly due to a cash flow shortfall or have a less than perfect credit score, Kabbage could be a promising option.

What we like

  • Borrowers with fair credit can apply
  • No prepayment penalties
  • Streamlined application journey
  • No origination fees

What we don't

  • Late payment fees are applicable
  • Short repayment terms
  • Business assets required

Business loans tailored to your needs

$500,000

Max. Loan Amount

6+ months

Time In Business

$10,000+

Monthly Revenue

600

Min. Credit Score

Overview

National Funding offers small businesses working capital and equipment financing loans that are suitable for a broad range of businesses, and you could receive approval and funding within 24 hours.

What we like

  • Early payoff discounts
  • Fast approval and funding
  • High approval rates for loan applications
  • Personalized experience

What we don't

  • Daily or weekly repayment
  • High minimum annual revenue

Considers applicants with bad credit profiles

$500,000

Max. Loan Amount

6+ months

Time In Business

$8,000+

Monthly Revenue

500

Min. Credit Score

Overview

Uplyft Capital provides fast funding turnarounds and a straightforward online application process.

What we like

  • Bad credit businesses are eligible
  • Fast funding turnaround
  • Transparent factor rates
  • Simple online application process
  • Range of funding options

What we don't

  • High factor rate
  • Daily or weekly repayment
  • Low revenue businesses do not qualify

What is an e-commerce business loan?

E-commerce business loans are ideal for companies that sell products online and in physical stores. It’s designed to help you increase your sales through improved customer service and marketing campaigns. You can also use the money to expand your inventory or upgrade existing technology to keep up with growing demand from customers.

Types of e-commerce business loans

Here are a few types of e-commerce business loans:

  • Business term loan: A business term loan is provided as a lump sum upfront. It allows you to borrow money for a fixed period, such as one or two years. The interest rate on these loans is usually lower than other types of loans, and you’ll have to make monthly payments.
  • SBA loan: The SBA Small Business Administration (SBA) loan program provides financial assistance to small businesses through participating lenders in the form of loans, loan guarantees, and counseling services.
  • Business line of credit: A business line of credit is an agreement that allows a business to borrow money as needed, up to a set limit. When you need to make a purchase or pay a bill, you can draw funds from your account as needed, up to the amount you’ve agreed upon with your lender.
  • Invoice factoring: Invoice factoring is when you sell your business’s unpaid invoices at a discount, typically around 90% of their value. The factoring company will pay you immediately but you’ll incur a fee as time goes on if payments are not collected. The factor will keep any unclaimed funds as collateral until then.
  • Merchant cash advance: A merchant cash advance is a short-term loan that allows you to get immediate cash for your business. It is typically based on your future credit sales.

Why should you get an e-commerce business loan?

There are many reasons why you should get an e-commerce business loan. Here are some of the most common ones:

  • Business credit will improve: Getting a business loan will improve your business credit score and help you get better terms on future loans.
  • Improves business adaptability: Business lines of credit are flexible and versatile tools that allow businesses to adapt quickly to changing market conditions. They are also an effective way for companies to grow their operations whenever they need money for expansion or other purposes. These loans can be used for any purpose that improves operations or increases profitability—even if it’s just buying inventory or equipment needed for growth.

What are e-commerce business loans used for?

E-commerce business loans can be used to fund a variety of expenses. Here are some common uses:

  • Cover various marketing expenses: Many e-commerce businesses use their loan funds to pay for search engine optimization (SEO) and pay-per-click (PPC) advertising. These marketing tactics can help your site gain more exposure, leading to increased sales and revenue.
  • Upgrade your website: You may want to use your loan funds to upgrade your website to look more professional and have better functionality. This could include adding features like product comparison tools or social media integrations.
  • Pay for operational expenses: Operational expenses include employee salaries and benefits, office supplies, and utility costs. E-commerce business owners often use their loans to cover these costs when they cannot generate enough cash flow from their sales revenue alone.
  • Purchase inventory: Buying products to sell on your website is a key part of any e-commerce business. You need to have inventory in stock to fulfill orders and satisfy customers. You’ll have trouble growing your business if you don’t have enough money to buy the inventory. An e-commerce loan can help you purchase inventory and grow your business.

How to choose the best e-commerce business loans

Here are some tips to help you choose an e-commerce business loan:

  • Figure out how much you need: Before you apply for a loan, you need to figure out how much money you need. You will have to repay the funds, plus interest and fees. It’ll have to fit your cash flow projections.
  • Interest rates and fees: The interest rate is one of the most important factors when choosing a loan program. Some lenders offer fixed-rate loans, while others offer adjustable-rate loans.
  • Repayment plan: The repayment plan for your loan is very important because it dictates how much you will have to pay each month and how long it will take to pay off the entire loan amount. The repayment plan options vary with each lender and may include fixed payments over a set amount of time or adjustable payments based on your earnings.