E-commerce has grown exponentially in the last few years. It now accounts for around 10 percent of all retail sales in the United States.

Many people have found success in opening online shops. Some use a marketplace like Amazon, while others operate a custom retail website.

Running any online shop costs money. You need to buy inventory, pay for packaging and shipping, and you’ll need to pay yourself for your time. Other costs, such as design, web hosting, and even accounting services can add up.

If you want to get into e-commerce, you’re going to need some capital to fund your efforts. Our guide will show you how to finance a business for success. Here, we’ll explore eight of the most popular types of funding for e-commerce businesses.

1. Research Grants for Businesses

Business grants can be a good option for people looking to start or grow an e-commerce business. There are many different kinds of grants out there, but they’re not always easy to get. This is especially true for small e-commerce ventures.

If you’re starting out, you can explore the option of a startup grant. Keep in mind that you’ll need to meet the requirements of the grant to qualify. For example, some grants need the business owner to match funds.

Grants are good options if you don’t have cash flow since they don’t need to be paid back. Grants are often available from local governments. Private organizations like universities may offer grants to alumni.

2. Use Your Personal Savings

This is another option for business owners looking to start an e-commerce business. You may have some personal savings from your job. You might have other financial assets, such as a whole-life insurance policy or a pension plan.

These options can provide the business capital you need to get started. Business owners trying to expand their operations have often exhausted these funds. They’ll need to look elsewhere.

3. Crowdfunding is a Newer Option for Creatives

If you’re selling something you’ve made yourself, you may be able to crowdfund for your business.

People typically won’t fund the set-up of a shop or a marketplace retailer. Successful crowdfunding campaigns often offer something back. A good example would be a free copy of the product when it’s finished or an offer to buy the product at a discounted price.

If your product is unique, creative, and one-of-a-kind, crowdfunding might work for you.

4. A Business or Home Equity Line of Credit Could Help

If you’re going to look into an e-commerce business loan, be sure to consider the type of loan you’ll be getting. A line of credit may be a smarter choice than a more traditional loan.

This is because a line of credit provides more flexibility. With a line of credit, the funds are always available to you. When you make a payment on this type of loan, the capital immediately becomes available to you again. Business lines of credit help small e-commerce ventures with their cash flows.

If you don’t qualify for a business line of credit, you may be able to get a home equity line of credit. This allows you to leverage the value of your home or other property to fund your business.

5. Traditional Bank Loans Could Help with How to Finance a Business

A traditional bank loan is often the first solution people think of when they ask how to finance a business. It can be a great option to fund growth or even to fund your business as you get set-up.

Unlike a line of credit, a traditional bank loan “disappears” as you pay it back. You’re given a lump sum of money to inject into the business. You’ll then pay it back, with interest.

The capital on the loan doesn’t become available for you to use again. If you need a one-time injection of cash, a loan could work.

6. The SBA Also Offers Loans

Banks and other lenders are sometimes leery of making loans to e-commerce ventures. In that case, you might look to the Small Business Administration.

The SBA offers guarantees to participating banks. The guarantee makes it more attractive for the bank to offer you the loan.

The SBA has several programs. Their microfinancing option is one of the best startup business loans for women and other minority groups.

The requirements to get an SBA loan can be quite daunting. It may be easier to secure capital from other sources. Think of the SBA as a sort of last resort.

7. Check out Peer to Peer Loans and Venture Capital Options

You know there are other, successful business owners out there. Some of them may be looking for investment opportunities. They might be willing to provide venture capital to you.

Peer-to-peer loan networks have been rising in popularity, as well. These online networks connect you with other business owners who make a personal loan to you. Loan terms are structured and charge interest the same way a bank would, but without a lot of the red tape.

8. Get a Business Credit Card

Another popular option for business owners is a business credit card. As a line of credit, this form of funding will help you manage your cash flows.

Credit cards allow you to make purchases even if you don’t have the cash available immediately. You can then pay down the bill when the funds are available. What you’ve paid off becomes available for use in the business again.

If you need to buy stock or pay invoices, a business credit card can be a smart option for how to finance a business.

Discover the Right Funding Options for Your Business

Every e-commerce venture has different needs. Since your business is unique, the mix of funding you use will likely be unique as well. You have plenty of options for how to finance a business in e-commerce.

Want to learn more about financing and your business? Our blog has a wealth of information you can use to keep growing your business. Learn powerful solutions for financing, productivity, and more.