Finance to fuel your eCommerce business

eCommerce funding options

eCommerce funding covers a range of financing options for online businesses. Whether you need to boost inventory, invest in marketing, or manage cash flow, there are tailored solutions to help you access the capital required to grow.

From secured and unsecured loans to revolving credit and merchant cash advances, each option offers unique benefits to support your eCommerce goals.

Here’s an overview of some of the available eCommerce funding solutions and how they work.

Unsecured business loans

Unsecured business loans do not require collateral but may have higher interest rates than secured loans. This is because the lender’s risk is increased without the safety net of collateral if you default on the loan.

They can be a good option for businesses that don’t own valuable assets to offer as collateral against the loan.

This form of financing can be used for virtually any business purpose, like boosting your marketing efforts or investing in operational upgrades. Typically, unsecured loan amounts of £1,000 to £500,000 are available over six years.

Merchant cash advance

Merchant cash advances are a flexible funding option for eCommerce businesses that need quick access to cash. The lender provides an upfront sum in exchange for a percentage of your future credit and debit card sales.

This type of finance is helpful if your business’s revenue fluctuates, such as if your sales are seasonal. The repayments are made automatically through daily or weekly deductions from your card sales.

The repayment process adjusts to your business performance, so the more you sell, the faster the advance is paid off. This makes merchant cash advances an ideal solution when you need funding without the commitment of fixed monthly repayments.

Revolving credit facility

Revolving credit facilities are similar to a business overdraft; they give you access to a line of credit you can use as and when you need cash for your business.

This type of financing can help your eCommerce business cover ongoing expenses or provide a safety net to cover cash flow issues.

Typically, you can borrow between £10,000 and £2 million over two years. The available credit line goes down as you borrow, but the original amount will become available again as soon as you pay back what you owe.

Growth Guarantee Loan

The Growth Guarantee Scheme (GGS) is a government-backed finance initiative designed to help eCommerce businesses access the funding they need to invest and grow.

This type of borrowing is useful if your online business has faced financial challenges and needs additional capital to move forward.

Loan amounts range from £25,000 to £2 million, with repayment terms of up to six years. It’s also available through various products, including unsecured loans, secured loans, asset finance and invoice finance.

How eCommerce funding can help your businesses grow

Getting financing for your business is a big decision, but it could be the key to achieving growth and your goals.

There are several ways that using external finance can help your online business grow and thrive, including:

Upgrading systems

Upgrading your eCommerce systems can improve your business’s efficiency and customer experience. It can also help you better manage orders, inventory, and customer data.

Unsecured business loans are a flexible option for covering the costs of system upgrades without needing collateral. Alternatively, a merchant cash advance can provide quick access to funds if your sales fluctuate.

Upgrading your systems allows you to stay competitive, meet customer expectations, and position your business for sustainable growth.

Buying more stock

Investing in more stock can help your eCommerce business increase sales and growth. Securing funding allows you to purchase the inventory you need to meet demand, expand your product range, and capitalise on new opportunities.

Having sufficient stock means you can fulfil orders on time, reduce backorders, and keep your customers happy. This is especially important during peak sales periods or when launching new product lines.

Merchant cash advances can be a good option if your sales fluctuate, as repayments are linked to your revenue. Alternatively, a revolving credit facility offers flexible access to funds whenever you need to restock.

Investing in marketing

Effective marketing can help your online business reach new customers, increase brand visibility, and drive sales.

Unsecured business loans offer a lump sum to cover substantial campaign costs, while a revolving credit facility can support ongoing marketing expenses, giving you the flexibility to scale your efforts as needed.

If your business experiences seasonal peaks, a merchant cash advance could be the right option. Repayments are tied to your revenue, allowing you to increase your marketing spend during busy periods without straining cash flow.

Expanding your business premises

As your eCommerce business grows, you may need to expand your business premises to help you keep up with demand, store inventory, and support long-term growth.

Whether you’re looking to invest in a larger warehouse or upgrade your office space, external funding can help. A secured business loan is a good option if you’re planning a significant property investment, as they usually offer larger amounts at lower interest rates when backed by collateral.

By securing the right funding, you can ensure your business has the space it needs to scale, maintain efficient order fulfilment, and stay prepared for future growth.

How to choose the right option

To help you work out which funding option is best for your business and goals, think about things like:

• What you want to use the loan for
• The loan amount you need and repayment terms
• How much flexibility you need
• Whether you want to use assets as collateral

If you need more help determining which type of eCommerce finance is right for you, speak to one of our team members today.