Financing for e-commerce
Online brands pay for inventory and advertising well before the sales come in.
Key points
- Online brands pay for inventory and advertising well before sales come in.
- Lenders can see your sales history through your platform data.
- Growth often outpaces cash flow, especially around big sales events.
- Wholesale accounts on payment terms can be factored.
How financing works in e-commerce
E-commerce businesses can grow fast, but growth eats cash. You pay manufacturers for inventory, often months ahead, and spend on advertising before the sales arrive. A successful product launch can leave you short on stock just when demand peaks.
Financing for online brands focuses on working capital: funding inventory and marketing so you can keep up with demand.
Common financing needs
Here’s how businesses in this industry typically match their needs to the right kind of financing.
| What you need | Usually the best fit | Why |
|---|---|---|
| Inventory orders from manufacturers | Lines of credit | Fund production runs and repay as stock sells |
| A growth push or new product line | Term loans | A lump sum for launches, hiring and marketing |
| Wholesale accounts on terms | Invoice factoring | Advance on invoices to retailers who pay in 30 to 60 days |
| Buy an established brand | Business acquisition | Acquire a brand with existing customers and sales |
How NorthMerit can help
Apply once and we’ll connect you with one financing partner who works with businesses like yours. It’s free, and there’s no obligation.
What lenders look at
Lenders look at your monthly sales history, your margins after advertising and shipping, return rates and how concentrated your sales are on one platform or product.
Being able to share platform reports and advertising data helps lenders understand your business quickly.
Other things partners commonly ask about: inventory paid for months ahead; marketing spend ahead of revenue; wholesale accounts on payment terms.
Funding a production run
An apparel brand needs $120,000 for a production run three months before its spring launch, and repays it from launch sales.
How to prepare
Gather 12 months of platform sales reports, your margins by product, recent financial statements and supplier quotes for the inventory you’re funding.
Common questions
Is NorthMerit a lender?
Does it cost anything to apply?
Who will contact me?
Other industries
The right financing, from the right partner.
Apply once. One financing partner who knows businesses like yours. Free, with no obligation.
