How to Secure a Walmart Small Business Loan for Your Online Store

How to Secure a Walmart Small Business Loan for Your Online Store

eCommerce businesses are growing, and the anticipated annual growth rate is in the double digits. Estimates place the 2023-2027 CAGR at 11.51%, making the market in the United States alone climb to $1.563T in just the next four years. While this tremendous growth is exciting for anyone already in the eCommerce space, it also points to one clear strategy that all business owners should adopt: the time to grow is now, and failing to grow may mean losing your position altogether to more aggressive competitors. A Walmart small business loan can be a smart vehicle for achieving precisely that.

There are two key steps that every eCommerce business should take: first, spread your brand across as many platforms as possible, in terms of both marketing platforms and sales platforms. Second, make sure you have the funding to optimize your business across each platform. 

Without money to grow sales and brand recognition, you can flounder in a new platform and may even lose your position. If you're here, you may already have been invited to join Walmart Marketplace. This guide will help you complete the second step—determining the right source and program for funding so you can see measurable growth from the Walmart branch of your business.

Before Securing a Walmart Small Business Loan: How Can You Grow Your Business by Making Walmart Marketplace One of Your Online Platforms?

Why should you build an online store on Walmart Marketplace in the first place? Many people worry about becoming overly dependent on a third-party platform like Walmart for sales, and they want to grow an independent website instead. 

However, this approach can truncate your reach and limit your ability to sell to consumers. Instead, opt for an omnisales strategy, in which you sell across multiple different platforms (both third-party and independent), so you can effectively diversify your revenue streams. Walmart Marketplace, in particular, offers some significant advantages to any sellers invited to join their marketplace. You can:

Get a Bigger Reach

Walmart is the second-largest online seller after Amazon. For virtually any metric you choose, Walmart Marketplace is showing growth in terms of sales, seller volume, and access to consumers. They grew their seller community by 66% from 2021 to 2022, with more than 150,000 sellers on their platform. 

Related: Revenue-Based Financing Term Sheet: Guide for Understanding

Walmart Marketplace also sees over 120 million unique visitors every month. While some of these visitors may be cross-over from Amazon or other online shopping sites, a lot of the traffic will be new to your brand. You can increase touch points and be present whenever they decide to make a purchase.

Leverage Walmart's Seller Services

Walmart Marketplace doesn't just open the door to their online sales platform and leave you to figure it out. The company also gives you an abundance of selling resources so you can see a higher rate of success, faster. These tools include:

  • Walmart Fulfillment Services: A fulfillment program that doesn't have minimums or maximums, so you can more easily manage inventory and get orders to customers. This program offers complete inventory storage, return management, and shipment services.
  • A dashboard with the analytics and insights you need to capitalize on emerging trends.
  • Sponsored Search ads so your products can be at the top of relevant searches.

These tools make it easy to onboard your store through Walmart Marketplace, whether you're relatively new to the eCommerce market or you're looking for a cost- and time-effective platform to add to your business.

Consider Walmart Marketplace Capital

Walmart offers another critical advantage to its sellers: Walmart Marketplace Capital. This funding is similar to a cash advance or merchant advance. If your business qualifies for the program, you'll receive a cash offer based on your Marketplace sales volume and performance history. 

If you accept the offer, you'll receive the cash through your preferred payment processor. That funding can then go toward more inventory, ad space, or other growth approaches. If limited cash is holding back your ability to grow, then Walmart Marketplace Capital can remove that obstacle.

A Deeper Look at Funding: How Can a Walmart Small Business Loan Grow Your Business?

The idea of a Walmart small business loan can initially seem overwhelming. After all, taking on debt introduces a new liability to your books and can squeeze your monthly cash flow. However, access to capital that you use for increasing your store's ability to generate revenue can offset those risks and help you either pivot to adjacent niches or expand your reach across your current target market. Some of the ways you can use the funds from a Walmart small business loan are:

  • More Inventory: Depending on your current cash flow, you may only be able to order a certain amount of inventory. Instead of leveling up slowly and organically, a cash advance lets you buy more immediately so you can sell it.
  • Better Per-Unit Rates: Depending on your suppliers, you might have different per-unit product rates. Lower volume orders are less efficient, so they are more expensive per product. Once you can buy bigger orders, that per-unit cost can fall.
  • More Ads: Alternatively, allocate your new cash to Walmart Sponsored Products ads. This can make your products much more visible, especially as you try to focus attention on new products in your catalog. Placing your ads closer to the top of the search gets more eyes on your products.
  • Better Inventory Management: If you've been making do with patchwork order fulfillment services, make the switch to Walmart Fulfillment Services (WFS) so you can guarantee your store's compliance with Walmart's fulfillment requirements and access their dashboards, APIs, and support.
  • Up-Front Possibility: Ultimately, cash now lets you grow now. If you wait until your store organically accrues the funds through sales, competitors may outgrow you and cut off your access to the market.

3 Ways to Secure a Walmart Small Business Loan

Walmart Marketplace Capital is one way to fund your store's growth on the platform, but it's not the only funding option. Consider these three popular ways to access cash for your business. As you learn more about each option, you can consider the pros and cons in regard to your own eCommerce business and growth strategy.

1. Through the Walmart Marketplace Capital Program

If you're a Walmart Marketplace seller, you can visit your Seller Center—there may already be an offer waiting. This cash advance program considers your sales volume through the Walmart platform, not your sales overall, so the cash may be less than you think your store should receive. But you can access it quickly, apply it to inventory and marketing initiatives, and repay it conveniently through the platform. 

However, that convenience may be a little too convenient for your tastes: Walmart will automatically take repayment from your sales revenue, and, if sales aren't sufficient in a given pay period, they can take the remainder of the due payment from your connected bank account. 

2. Through Conventional Loan Options

Traditional business loans offer money to qualifying businesses through mechanisms you may be more familiar with: they assess your business risk, approve or decline the loan, and issue you the funds with an interest rate. You'll make monthly or weekly repayments that include portions of both the interest and the principal.

Related: Preparing for Recession: The Benefits of Revenue-Based Financing Over Traditional Lending

While this structure is familiar to many businesses, it's not really built for eCommerce businesses. The typical qualification process (which assesses the business's capital, assets, collateral options, and commercial credit history) means even a thriving eCommerce business might not fit the bill. Payments also follow a strict schedule, regardless of the peak and off-peak variances in eCommerce sales cycles.

3. Through a Merchant Advance Program That Can Recognize Walmart Sales

There are many merchant advance programs available online for sellers, and they can be a much better fit for eCommerce business owners. Rather than assessing businesses on conventional norms that may not apply, they look squarely at sales to see how much cash your business should qualify for. Funding providers also tie repayments to sales revenue; you pay back more in months when sales are high and pay back less during slower months. 

This structure is great for protecting your cash flow. However, some funding providers may charge a high factor rate, so the total fees can be even higher than a credit card or bank loan. Take advantage of the flexible repayment structure and fast access to cash without the high financial risks by looking for a merchant advance program that:

  • Ties repayment to your sales volume and only collects a low percentage of your sales each month.
  • Has very low and predictable fees so you only pay fees with single-digit percentages on the advance.
  • Only gets paid when you make sales, which means your merchant advance partner cares about your business' growth instead of just getting money off fees and interest.
  • Considers all of your sales channels. A Walmart small business loan through Walmart Marketplace Capital only looks at sales on its platform, just like Amazon and Shopify; may only consider sales through their individual platforms.

Take the Next Step to Get a Walmart Small Business Loan for Your Online Store

Access to cash matters just as much as access to buyers as the eCommerce market continues to ramp up. Secure the cash you need through the right funding program, so you can grow faster without jeopardizing your cash flow. Onramp offers cash advances based on your sales volume across multiple platforms, and we only collect 1% of your sales to pay down the advance. You can grow your business while simultaneously protecting your margins and keeping your business financially healthy. Talk to us today about the details, or sign up to prequalify and get an offer!