Ecommerce Business Loans: 5 Things you need to know

Starting an ecommerce business can be a great way to enter the world of entrepreneurship. However, like any business, it requires capital to get started and grow. 

Ecommerce business loans are a great way to access the funding you need to launch and scale your ecommerce business. 

In this blog post, we'll discuss the things you need to know about ecommerce business loans.

1. Types of Ecommerce Business Loans

There are various types of ecommerce business loans available, each with its own advantages and disadvantages. Some of the most common types include:

• Traditional Bank Loans: These are loans offered by traditional banks and credit unions. They typically require collateral and have strict credit requirements. They also have longer application processes and may take weeks or even months to receive funding.
• Online Lenders: These are alternative lenders that offer loans to small businesses, including eCommerce businesses. They typically have more lenient credit requirements and shorter application processes. However, they may have higher interest rates than traditional bank loans.
• SBA Loans: These are loans from the Small Business Administration (SBA). They typically have lower interest rates and longer repayment terms than traditional bank loans. However, they have strict eligibility requirements and may have longer application processes.
  
  

2. Eligibility Requirements

To qualify for an ecommerce business loan, you'll typically need to meet certain eligibility requirements. These may include:

• Time in Business: Many lenders require that your business has been in operation for a certain amount of time, typically at least six months to a year.
• Revenue: Lenders may require that your business has a certain amount of revenue, typically at least $50,000 to $100,000 per year.
• Credit Score: Lenders will typically review your personal and business credit scores to assess your creditworthiness.
• Collateral: Some lenders may require that you provide collateral, such as equipment or real estate, to secure the loan.
  
  

3. Loan Amounts and Terms

Ecommerce business loans can vary in terms of loan amounts and repayment terms. The loan amount you qualify for will depend on your business's revenue and creditworthiness. Repayment terms can range from a few months to several years, depending on the lender and the loan amount.

4. Use of Funds

While some lenders have strict requirements on how you use your funding, others provide unrestricted use of funds. You may want to use your business loans for the following purposes including: 

• Inventory: Many ecommerce businesses require a large amount of inventory to operate. An ecommerce business loan can provide funding to purchase inventory and keep up with demand.
• Marketing: Marketing is essential for any ecommerce business to attract customers and increase sales. An ecommerce business loan can provide funding for marketing campaigns, such as social media advertising or email marketing.
• Equipment: Ecommerce businesses may require specialized equipment, such as computers or packaging equipment. An ecommerce business loan can provide funding to purchase this equipment.
  
  

5. Choosing a Lender

When choosing a lender for your ecommerce business loan, it's important to consider factors such as interest rates, repayment terms, and eligibility requirements. It's also important to research the lender's reputation and read reviews from other business owners who have worked with the lender.

In conclusion, ecommerce business loans can provide the funding you need to launch and grow your ecommerce business. By understanding the types of loans available, eligibility requirements, loan amounts and terms, use of funds, and choosing a lender, you can make an informed decision about which loan is right for your ecommerce business.

And, instead of researching and applying to many different funding options, save time by using Yardline’s simple application.

Yardline’s single application provides you with access to a full suite of funding products including small loans, business and personal credit cards, revolving lines of credit, SBA loans, and so much more. A team will walk you through your options and get you the funding you qualify for in as fast as 24 hours.

Apply today to get rates as low as 7.49%* and watch your business grow!

*Rates for qualified applicants as of March 1, 2023