Inventory financing for ecommerce sellers: how Onramp funds your inventory buys
Most ecommerce sellers pay for inventory weeks or months before it sells. Onramp Funds gives sellers working capital to cover that gap, with repayment that runs while the inventory sells. Here is how it works, with a worked example of a $100,000 production run.
The cash gap inventory creates
Every inventory purchase has a cash-to-cash cycle: the time between paying your manufacturer and collecting the money from the units you sold. For most sellers it looks like this:
- Order notice. Your manufacturer needs advance notice to schedule production.
- Deposit. Many manufacturers ask for part of the order cost up front, often 30% to 50%.
- Production. Several weeks while the order is made.
- Balance due at ship. The rest of the order cost is due before the goods leave the factory.
- Freight and receiving. Time in transit, plus unpacking and check-in before units can sell.
- Sell-through. The weeks it takes to sell the units and collect payouts from your sales channels.
Add those up and the gap between your first payment and your last sale is often three months or more. Sales revenue covers it eventually. Inventory financing covers it now.
How Onramp funding supports inventory purchases
Onramp Funds provides working capital to ecommerce sellers, sized to your combined sales and stated in your offer. Sellers use it to pay manufacturers, cover deposits and balances, and fund freight. There are three ways to repay, and all three can fit an inventory cycle:
| Repayment option | How it works | Fits inventory when |
|---|---|---|
| Share of daily sales | Payments rise and fall with your sales | Sell-through is uneven or seasonal, and you want payments to slow when sales slow |
| Fixed schedule | A set payment on a fixed schedule over 1 to 12 months | You know your turn time and want a predictable payment |
| Rolling Cash Line | Draw what you need when you need it, and repay each draw as you sell | You pay a manufacturer in stages, or run one production run after another |
Worked example: a $100,000 production run
Here is how a seller with a U.S.-based supply chain might fund a $100,000 production run. The manufacturer needs two weeks of notice, takes four weeks to produce the order, and asks for 50% up front and 50% when the order is ready to ship.
| When | What happens | Funding |
|---|---|---|
| Week 0 | Place the order and pay the 50% deposit | Draw $50,000, repaid over four months |
| Week 6 | Production finishes. Pay the 50% balance so the order ships | Draw $50,000, repaid over three months |
| Week 6 | Place the next production run, for inventory you will need three months out | Draw for the next deposit, or wait and fund it from sales |
| Week 8 | Inventory is delivered, unpacked and ready to sell | Payments come out weekly or every other week as the inventory sells |
| Weeks 8 to 16 | The run sells through over about 60 days | Sales pay down the draws |
If the inventory sells through in about 60 days, the four-month and three-month terms give the sales time to pay down each draw. A seller who would rather keep it simple can take one four-month advance for the full $100,000 at the start instead of two draws.
Either way, the payments come out of the sales the inventory produces, and the next production run starts while the current one is still selling.
What it costs
Onramp's fee is flat and disclosed up front in your offer, as low as 9% of the funded amount (for example, $4,500 on $50,000). It does not compound. Longer terms cost more, so match the term to how fast your inventory sells rather than taking the longest term available. Subject to credit eligibility; rates and terms may vary.
Who qualifies
- At least $10,000 in average monthly sales
- At least six months in business
- Selling on Amazon, Shopify, Walmart, TikTok Shop, eBay, BigCommerce, WooCommerce, Squarespace, Shopline or Stripe
- No personal credit check to see your offer
Approval comes the same day, and funds arrive the same or next business day. See how Onramp works or compare the funding options.
Before you fund an inventory buy
Frequently asked questions
What is inventory financing?
Inventory financing is funding used to pay for inventory before it sells. You use the funds to pay your manufacturer or supplier, then repay as the inventory sells.
Does Onramp Funds offer inventory financing?
Yes. Onramp Funds provides working capital to ecommerce sellers, and many use it to pay for inventory. Repayment can be a share of daily sales, a fixed schedule over 1 to 12 months, or a Rolling Cash Line where you draw what you need. Subject to credit eligibility; rates and terms may vary.
How do I fund a deposit and a balance due at ship?
With a Rolling Cash Line, you can draw for the deposit when you place the order and draw again for the balance when production finishes, with each draw repaid on its own schedule. You can also take one advance for the full order at the start.
How long should an inventory financing term be?
Long enough to cover the time from your first payment to the manufacturer until the inventory has sold through. A term that is longer than you need costs more, because longer terms carry a higher fee.
What do I need to qualify?
At least $10,000 in average monthly sales and six months in business, selling on a supported platform. There is no personal credit check to see your offer.
Onramp Funds
Funding built around your sales
Connect your store and see what you qualify for. Repay as a percentage of sales, with no personal credit check.
Funding in as little as 24 hours.
