Business funding for ecommerce businesses
Ecommerce revenue arrives as payouts from a payment processor rather than cash across a counter, and a big inventory buy or an ad-spend push often has to happen weeks before that inventory turns into sales. Because processor payouts are so trackable, revenue-based financing tied directly to those payouts has become a common fit here, alongside more standard options.
- One application, several lenders
- No credit pull to see your options
- No fee to you, ever
Common funding needs
- Buying inventory ahead of a launch or a peak selling season
- Funding an ad-spend push to scale a proven campaign
- Covering the gap between a supplier invoice and customer sales
- Smoothing cash flow through a slower sales month
What usually fits
Products that usually fit
- Revenue-based financing structured like an MCA but repaid as a percentage of processor payouts instead of card swipes.
- Working capital for an inventory buy or ad-spend push.
- Line of credit for ongoing swings between supplier payments and sales.
- Term loan for a larger, planned inventory or equipment purchase.
How a merchant cash advance works for you, and when it is too expensive
For an ecommerce business, an MCA-style advance is usually repaid as a fixed percentage of what your payment processor (such as Stripe, Shopify Payments or PayPal) pays out each period, rather than daily card swipes at a register. At an illustrative factor of 1.15–1.45, a $30,000 advance costs $34,500–$43,500 in total, regardless of whether payouts are strong or slow that month.
It gets expensive when ad performance softens or a platform holds a reserve, since the payout the holdback is drawn from shrinks while the total owed does not. Compare the total dollar cost against a line of credit or a term loan sized to the same inventory or ad spend before choosing this route.
Compare term loans, lines of credit, cash advances and equipment financing side by side →
Separately, our sister company CELER Merchants offers card processing.
Illustrative example
A worked example
An online store needs $50,000 to buy inventory ahead of a peak sales season. With a term loan over 2 years at an illustrative 8–20% APR, payments come to about $2,261–$2,545 per month, or $54,273–$61,075 in total.
The same $50,000 as revenue-based financing tied to processor payouts at an illustrative factor of 1.20–1.40 means paying back $60,000–$70,000, usually within 6 to 12 months as payouts come in.
Illustrative example only, not an offer or a quote. Rates, fees and terms are set by each lender and depend on your business. Fees are not included unless stated.
Underwriting
What lenders look at
- Monthly payout history from your payment processor or processors
- Ad spend and return on ad spend for any campaigns being scaled
- Supplier terms and how far ahead inventory has to be paid for
- Existing advances or holdbacks on any processor account
- Owner credit
Honestly
Who this is not for
- A store with no sales history or payout track record yet
- Funding ad spend on a campaign that isn't already proven to convert
- Stacking a second advance on payouts already committed to a first
If borrowing does not make sense, we will say so.
Are you a match?
Lender network minimums
Close but not quite there? Apply anyway and we will tell you honestly what is possible.
*Best available terms from lenders in our network. Every lender sets its own criteria; approval, amount and funding time are decided by the lender and not guaranteed.
| Time in business | 1 year+ |
|---|---|
| Monthly bank deposits | $20,000+ |
| Credit score | 500+ |
| Bank account | Business |
| Fee to you | $0 |
| Credit pull to start | None |
FAQ
Ecommerce funding questions
Does this work if I sell through Shopify, Amazon or several platforms at once?
Often, yes. Lenders can usually look at payout history across multiple platforms; tell us which ones you use.
Is revenue-based financing the same as a merchant cash advance?
It works the same way, as a fixed percentage repayment, but the percentage is taken from processor payouts instead of in-person card swipes.
Can I get funding to scale ad spend?
Sometimes, if the campaign already has a track record of converting profitably. Lenders want to see it is proven, not speculative.
What if my payment processor holds a reserve?
Tell us about it. A reserve reduces the payout available for repayment, which affects what a lender is comfortable offering.
Guides
Guides for ecommerce
Related
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Where we work: all US states · all Canadian provinces
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