How to Finance your eCommerce?

Capitalizing on market opportunities during peak activity times is usually cash flow intensive for eCommerce businesses. Finding the right resources at the right time is challenging and navigating amongst them is time consuming.


Here is a summary analysis of the most prevalent ones.


  • Bootstrapping
  • Friends and Family
  • State Grants and Loans
  • Bank Loans
  • Venture Capital
  • Crowdfunding
  • Revenue Based Financing



Personal savings are by far the most popular way of financing a new eCommerce business. It is easily accessible and non-dilutive, but of course it puts the invested money at risk.


More importantly, it requires the founder to have capital to invest.


Friends and Family

This is often the second port of call when founders do not have enough personal savings to invest in their eCommerce business.


However, founders will need to give capital in exchange for funding. In addition, it can become a cause for tension amongst close ones when the business does not perform as expected.


State Grants and Loans

In many countries as well as at the European Union level, SMEs are supported through a system of grants and loans with favourable conditions. These usually include long term repayment (if any) and low interest rates.


However, not all businesses are eligible for such funding, and the application process is often lengthy and burdensome. Therefore, this is not adapted to the needs of most eCommerce businesses.


Bank Loans

When businesses can get access to it, bank financing is often one of the cheapest ways to get funding. As banks mostly look to keep the risk level as low as possible, bank loans require a solid track record, a stable business outlook and a lengthy approval process. In addition, personal guarantees are often a necessity, and flexibility is non-existent.


All the afore-mentionned make bank loans mostly irrelevant to eCommerce needs, especially as they tend to invest in what is generally considered expenses by banks (inventory and advertising) . In any case, traditional banks generally lack the ability and technology to properly assess eCommerce businesses.


Venture Capital

eCommerce brands are usually not favoured when it comes to VC finance. The sector is generally invested in through providers of software and technology such as online stores, payment gateways and marketing platforms.


In addition, VC funding is dilutive, which means a partial loss of control and future profits of the business.



In the last few years, crowdfunding has been a popular method of financing new eCommerce ventures.


This is however a relatively slow way to get financed, since campaigns can last a few weeks. It is also better suited to launching new, innovative or exclusive products, and less adapted to funding a business’ daily operations.


Revenue Based Financing

As a form of simple, quick, flexible and unsecured funding solution, Revenue Based Financing is an attractive proposition for eCommerce. It is suited to the financing needs of eCommerce, however, fee rates tend to be higher than with bank loans, but in line with what crowdfunding platforms take.


With the use of advanced analytics and technology based on AI, Revenue Based Financing Providers (such as Scaleity) are able to effectively assess the risk profile of eCommerce businesses and propose increasingly attractive terms and fee rates.


To Sum Up:

Author: Matthias — Scaleity


Revenue Based Financing is the solution to eCommerce cash issues, with a fast, flexible and founder-friendly means of getting funds to accelerate their growth.


If you would like to further discuss how to grow your business with Revenue Based Financing, send us an email to [email protected]. We will be happy to look at what we can do for you.