7 Surefire Ways to Secure Funding For Your Ecommerce Business

Even if you have the ultimate master planning skills, it’s still impossible for you to prepare for every single emergency that might shake your eCommerce business.

Natural disasters like hurricanes, fires, and floods aside, all businesses will at one point or another encounter issues like sales slump or late invoice payment. Sometimes it could be that you have to quickly restock ahead of a major event to rake in high sales.

However, the challenge is that not all financing houses are open to providing funds for small eCommerce business because of their zero collateral and high risk.

So what do you do in times like this when you’re short of money? Where can you find the badly-needed cash to start, grow or keep your business afloat?

Read on to learn more about the 7 foolproof ways you can secure funding for your eCommerce business. 

  1. Crowdfunding

Provide funds for online startups and businesses that want to expand

For some time now, crowdfunding is usually the go-to place for several startups that need to raise capital and those that want to scale up.

Popular crowdfunding sites like GoFundMe and Kickstarter and many others make it possible for you to pitch directly to hundreds of thousands of investors – who could also be potential customers.

One of the many advantages of crowdfunding besides the capital is the free insight you get from the crowd. From the questions and comments alike, you can glean valuable information to tweak your product or service to better suit customer’s needs.

  1. Online Loans 

Provide quick funds for peak seasons and period of cash flow problems 

Majority of eCommerce businesses typically have a hard time securing funding from finance houses. Banks tend to avoid them like a plague because outside of inventory, and because they don’t usually have assets. 

Venture capitalists, on the other hand, are notoriously selective about the kind of sole proprietor eCommerce business they invest in. Not that you can blame them since every investor want a high guarantee that their investment is a safe bet.

While venture capitalists still fund companies in this sector, the lucky companies are those that make eCommerce much easier. Companies involved in services like payments, logistics, analytics, marketplaces, D2C models like renting/secondhand platforms, as well as customer service.

These lapses in funding for small eCommerce business is what spurred the creation of short-term SME lenders like Wayflyer, FunnelDash, and PayPal (which isn’t exactly an SME lender but recently added the loan service to its main payment services).

Let’s take a quick look at how some of the above-mentioned Small and Medium Enterprises (SMEs) operate:


This eCommerce financer provides online businesses with the much-needed cash to quickly grow their business without giving away control or ownership.

Like other SME lenders, Wayflyer gives quick loans that you can immediately access within 3 to 7 days. Before approving your loan, the company looks at your past business performance, and from that, they estimate your future revenue.

Based on that, your loan application is either approved, reduced or rejected. Due to the high risk of lending to small online businesses, SME lenders do charge high-interest rates, so it’s best to be sure that your business can absorb that before going down that lane.

It is also one of the reasons why Wayflyer usually encourages business owners to seek loans during seasonal peaks. That way, the high sales volume of the period can comfortably offset all debts while still leaving a significant amount of cash on the table for the business — a win-win strategy for both the financier and the lender.


This digital agency offers credit purely for running, scaling and optimizing ad campaigns. They understand the problem of cash shortages many founders face during ad campaigns.

Most business owners can’t afford to finance an extended advertising campaign as they’ll need cash for inventory and other vital business areas. In addition, a campaign of about 3 to 6 months or more is needed. 

The reason for this is that to survive in today’s business climate, you have to attract customers, lest another business will entice them. 


PayPal is one of the tech giants that are slowly coming into the SME lending scene. With PayPal, your eCommerce business can qualify for a loan even with bad credit.

In addition, your business or personal credit ratings are not a factor when you’re applying for a working capital loan.

  1. Venture Capital

Provides huge chunks of capital for fast-growing businesses in hyper growth phases

If your online company needs a massive capital injection to the tune of several thousands of dollars or maybe millions – then it would be best for you to seek out VC funding.

Venture capitalists are a lot willing to take risks and lend to businesses that banks won’t lend to. Besides, since they have a vested interest in your company, they would do all they can to help you grow and scale-up considerably.

The only hitch with this type of funding is that you must be ready to part with some equity and control when making major business decisions.

Other things worth remembering when going for VC funds are that it’s a long process that requires lots of hard work. On top of that, VCs do hedge their bets by favoring companies with disruptive technology or a unique business model.

When it comes to getting a VC fund, your business has to have something enticingly unique that makes it stand a world apart from rivals.

So as a small eCommerce operator, if you’ve decided that venture capital is the way to go, you might consider VC firms like Clearbanc or other similar VC firms that are more open to lending to small businesses.

Let’s briefly explore how Clearbanc operates:


Basically, this Canadian firm lends money to small digital companies. The loan is paid back based on the sales generated plus together with a sizeable interest. 

The business model of Clearbanc (also known as a merchant cash advance) isn’t really new. Many lending houses have offered it for years.

The only difference is, in the past, only brick and mortar businesses were eligible. At this time, Clearbanc has risen to offer such cash advances to digital companies like eCommerce stores.

For repayments, you pay back the principal and a flat fee that ranges from 6-12 percent depending on what you spend the funds on. Companies that get the lowest rates are the ones who use Clearbanc money only for advertising spend.

  1. Angel Investing

An angel investor is someone who gives you the seed money to get your business started. They also provide other ongoing support to stabilize your business and make it successful.

Once you connect with an angel investor, be prepared to negotiate because they often want to have a share of the business. You need to carefully consider if the equity you’re giving up is worth the amount of the angel’s investment.

Many times, an angel investor isn’t the super-wealthy entrepreneur you might have imagined. Angel investors could be a neighbor, family member, or friend. You can also find one on online funding sites that invest in startups.

NB: Many people confuse angel investors with venture capitalists. The two are similar in that they give your business cash and support to grow bigger. The difference is that angel investors fund your business with their own money but VCs fund companies using other people’s money. 

  1. Ecommerce Grants

Provide free cash, but the process is labor-intensive

If you are a woman, veteran or person of color, it would be worth your time to give eCommerce grants a try since it is basically free money.

Whether you fall into the above category or not, go ahead and do some little digging in your industry, alma mater, and geographic location to see if you’re eligible for any grants. Also, check if there’s any requirement attached to the grant and if it’s something you can live with.

  1. Supplier Financing

In this instance, your suppliers extend credit in exchange for some interest on the loan.

Supplier financing is good for getting an advance on supplies or overhead, but it may not give you the much-needed cash to run some vital operations.

  1. Bootstrapping with Personal Savings 

Many funding situations require you to show proof of return. If you’re just starting your eCommerce store, it’ll be pretty hard to produce any hard figures that your business is working. 

For this reason, if you can bootstrap with personal savings, then that could be your best option. If you choose to go down this route, you wouldn’t be the only one. 

In fact, a survey carried out by BlueVine revealed that 75% of entrepreneurs fund their business with their savings. Many times the money usually comes from a checking or savings account, retirement account like a 401(k) plan, home equity, or a life insurance cash value. 

There are big benefits to bootstrapping with personal savings: One, you won’t have to part with any business equity. Two, your business can grow faster since you don’t have to wait for approval of a bank loan or investor decisions.

Final Thoughts

Nowadays, it’s infinitely easier to get funding for your eCommerce business but you have to take care to negotiate a rate you can afford.

Before signing up for any loan, make sure the repayment plan you’re given won’t sink your business. More importantly, it’s advisable to borrow money only when it is absolutely necessary.

If you’re skilled enough to bootstrap your way (though this doesn’t favor scale-ups or fast growth) and still grow, by all means, do just that. 

However, if the only way out is to get outside funding and you’re uncertain about where to start, check out our preferred SME lenders.



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