Business Loans for E-Commerce Companies

It shouldn’t be a big surprise that the e-commerce industry is experiencing rapid growth—and it’s predicted to continue. Worldwide revenue is projected to reach $3,178 billion this year. With an expected annual growth rate of 9.47% for the next five years, the projected market value will be $4,997 billion by 2029—with 3.2 billion users.


Because e-commerce is constantly evolving, companies in this space must stay on top of the latest trends that will be crucial for their success. Ten of those trends are the continued rise of data analytics, AI reigning supreme, the importance of video marketing, the need for sustainability, the growing importance of social media, the growth of mobile shopping, the use of user-generated content, the rise of augmented reality, subscription as a key part of distribution and customer experience unlocking advantages.


An 11th trend is access to working capital—as brands with funds in hand will far outperform those without it. And fortunately, e-commerce companies have a number of options when it comes to securing business loans.


Top Considerations Before Applying for a Business Loan

E-commerce companies with existing businesses will find it easier to get funding than those just starting out since they have a track record that can help predict cash flow. Owners of new ventures may be asked to pledge personal assets to secure a loan. Whether your business is up and running or just getting started, some things to consider before you apply for a business loan include:

  • If you can afford to take on debt
  • How much funding you need
  • How quickly you need access
  • What you need the money for
  • Where you’re selling (Shopify vs Amazon vs privately hosted, etc.)
  • Whether you want flexibility in where you sell
  • What repayment terms you’re comfortable with
  • If you want to sacrifice equity in exchange for capital


Why Business Loans Benefit E-Commerce Companies

Most online sellers can’t front working capital on their own so they look for help in the form of e-commerce seller financing. Having that funding at hand helps owners engage in business activities related to growing their online store. It can also be crucial to regulating cash flow while spending a little more than normal, such as for a marketing campaign to drive more sales or explore new markets.


What Types of Business Loans Online Sellers May Want to Consider

The most common forms of e-commerce seller financing include:

  • Revenue-based financing
  • Merchant cash advances
  • Business loans
  • Business credit lines
  • Marketplace financing


The latter option—marketplace financing—is becoming more and more popular due to the number of e-commerce stores hosted on sites like Amazon and Shopify. While it can be tempting to turn to those giants for working capital, do your homework first, especially since working with Amazon Lending and Shopify Capital can limit your freedom and flexibility.


The Bottom Line

Opportunities abound for e-commerce companies and are only going to increase as time goes by. Whether you seek to start selling online or expand your existing e-commerce business, not having the funds to grow should not be a reason for you to stagnate. There are plenty of options out there to secure the funding you need to ensure your offerings get in front of as many eyeballs as possible.


Clear Skies Capital has helped many e-commerce companies determine the business loan that’s best for them and get the financing they need in a timely fashion. Contact us today at 800-230-9822 to discuss your company’s needs.