How to Get Funding for Your Online Business

How to Get Funding for Your Online Business

If there’s something that the pandemic taught us, the possibilities are virtually endless online. In a pinch, many businesses can move to a digital format. What that means is that we don’t need to wait for that pinch to move online.

While global uncertainty and restrictions on movement retained many people in their homes, it brought a certain air of inspiration and entrepreneurial spirit. Whether expanding or transitioning a brick and mortar business to the online world or stepping into eCommerce for the first time, business owners are looking to make their mark.

A dream will take you far, but there are practical things to consider, like how to get funding for your online business.

Build Your Brand: How to Get Funding for Your Online Business

The planning stage is a significant - and necessary - part of starting or expanding your business. You’ll need to spend some time strategizing about your market, objectives, and getting a realistic view of what is on the horizon. Envisioning your storefront and considering products is the fun part. Then, you need to look at your budget.

Whether you’re just starting, expanding into new territory, or you’ve been established for a while and want to take your business to a new level, funding is a primary component to getting to the next level.

Funding Options

There are a variety of funding types available to businesses, so how do you choose? A few factors will dictate which funding type you seek, including when you need the funds, how much you need, and whether you want the loan for the short or long term. Let’s look at some funding types to give you a clearer picture of options for funding your online business.


A great place to start is bootstrapping. That means investing your own capital. If you’re just starting, it’s great to test out in the market using your own funds. It may feel like a risk, but there is a distinct advantage: you won’t incur any debt.

Start saving and apply your funds where you can. If you’re opening an online marketplace, invest where you can to get a foundation started. Get your first customers organically and test out your offering. Once you have a few transactions under your belt, you can begin looking for investment.

Bootstrapping to set up a company helps you gain experience and get things moving practically to understand how workflows in your business move. Often things are different on paper than in practice, so this is a great learning and preparation moment.


For new startups, crowdfunding can be beneficial. If you have a new product to launch or a unique offering for a particular niche, consider sharing it on a crowdfunding platform like Kickstarter, GoFundMe, or Indiegogo. Particularly popular amongst tech startups and inventors, many of these platforms offer an opportunity to receive funding in exchange for equity.

Small Business Loans

Businesses that are already established but looking to expand may be interested in an SBA loan. The Small Business Association guarantees these loans acquired from SBA-approved lenders.

SBA loans have extended payment terms and require a low down payment. The downside is the application process. The paperwork can be tedious and time-consuming, and approval can take a while. You may also be required to put up collateral.

Related: Why Online Sellers Should Choose Ecommerce Business Loans

Venture Capital

Have an idea or a creation that will disrupt the market? Have a large capital request? A venture capital firm may be the one to help you out.

This option isn’t for everyone - it’s typically available to those seeking six-figure loans or more. VC firms look for disruptors and those with significant differentiation from what’s already available on the market. Instead of paying interest, you offer a stake in the company to the firm that invests.

You’ll get the funding you need, but bear in mind you’ll have less equity in your company. That means less financial freedom than you would have with other options.

Line of Credit

Best used for incremental business expenses, a line of credit is a bit like a hybrid mix of the principles of credit cards and bank loans.

When your application is approved, you’ll have an amount of financing available in your line of credit. Up until this limit, you can draw upon this whenever you need it. After that, you’ll be required to make minimum monthly payments, though interest is only charged for the amount you have borrowed and not for the total amount approved.

With lower or less established credit scores, lines of credit can come with a high interest rate attached. You may be required to supply collateral, and you’ll need to have documents verified every time you draw from your credit line, adding to your need for paperwork and processing times.

Credit Cards

Credit cards likely don’t need too much explanation. Similar to your personal cards, business credit cards allow you to cover day-to-day or one-off expenses. The application process for a credit card is relatively straightforward, and approval turnaround times are typically shorter than those of loans.

You will most likely receive an introductory interest rate which will increase after the first year. You will continue to pay interest on your remaining balance each month and are required to make minimum monthly payments. Credit cards offer an excellent opportunity to build business credit. As you raise your credit score, your issuing bank will likely increase your credit limit by providing more funding for your online business.

Related: 3 eCommerce Financing Options to Grow Your Business

eCommerce-Friendly Funding

Traditional funding options have their place in eCommerce, but out-of-the-box lending options take online businesses’ unique needs and challenges into account.

eCommerce businesses have to contend with a competitive market and rising consumer demands for availability and low prices. To rise above the competition, you need to have a comprehensive marketing strategy and stock on hand. With ebbs and flows in sales cycles, you can’t afford to fall behind in outreach to continue to reach clients.

eCommerce funding options are tailor-fit to the needs of online businesses. Rather than a traditional repayment schedule, payments align with the stock you have on hand. When you sell inventory, a percentage goes toward repaying your loan. If you have a slow period in your sales cycle, you can rest assured that your lender won’t fault you with rising interest or penalties for missing minimum monthly payments.

Diversify Your Capital Stack

Your business will have a variety of expenses, including operating costs, inventory, marketing, advertising, inventory, headcount, and more. No one funding option will suit all of these needs, so do yourself a favor by diversifying your capital stack.

Explore all of the ways you can get funding for your online business and select the methods that fit your business needs. A diverse and comprehensive capital stack will leverage financing options for short-term, mid-term, and long-term needs.

Onramp empowers online merchants with funding options that understand and meet their needs. With repayments tied to your inventory, you won’t feel burdened by your capital if you have a slow period. Get cash to invest in your business so you can thrive.