E-commerce funding: what are your options?

E-commerce funding: what are your options? | 4-minute read

Want to grow your online business? Not sure of the funding options available to you and your e-commerce business? You’ve landed in the right place!

Whether e-commerce is already your full-time gig or a side hustle you’re wanting to expand, we don’t blame you for investigating your options when it comes to funding. After all, there are many hidden costs of running an e-commerce business.

With extra funding for your online store, you could improve customer retention, incentivise online purchases, and even speed up distribution and delivery.

But knowing what funding options are available and which are best suited to you can be a challenge to figure out.

Enter Unicorn Accounting; expert e-commerce accountants ready and waiting to help supercharge your online business growth. Today we will be explaining the options you have when it comes to e-commerce funding to release your businesses full potential.

Business loans

A great option to secure funding for your e-commerce business is to check whether you are eligible to apply for a business loan from banks, credit unions, or online lenders. This money can then be used to finance inventory, marketing campaigns, technology investments, or new product launches.

While this may seem like the most obvious route to take, some banks will not lend to a start-up or early-stage investment. However, if you can secure a loan interest rate are often low, you can pay the loan back in equal instalments, and most are flexible in how you spend the funds.

If this is an option you are interested in, you’ll need to be prepared to present your business plan and cash flow forecast.

Government grants

Another option to secure e-commerce funding is through government grants. Government grants are available in a variety of forms, from cash awards to tax incentives.

There are many benefits to securing a government grant, for example, you never have to pay them back (in the UK) and you remain in control of business operations. However, applying for a government grant requires a lot more time and attention than simply placing your name on a waiting list.

It’s also important to seek out the best grant for you. There are a variety of different government grants available ranging from £10k to £1mn, depending on the circumstance and niche of your business. It’s also not guaranteed that just because you apply for a government grant you will be successful.

Equity investors

Through equity investors, your e-commerce store has potential to raise from thousands to millions of pounds in funding. The idea is that you give up a percentage of equity of your company in exchange for a cash award.

The people investing in your company are typically experts in that field and come with proven experience in growing different types of businesses. Not only this will you have access to their knowledge and expertise, but you’ll also get to connect with their wider network of contacts.

On the other side of the coin, equity funding means you surrender total control of your business as you hand over shares in your company to investors. In some instances, this control becomes less and less as you go through different rounds of investment.

Which e-commerce business funding is right for you?

Before deciding on which e-commerce funding solution is right for you, it’s important to consider:

-How much funding you need?

-How will that funding add value to your business?

-How are you going to repay the money?

By carefully considering these factors before applying for funding, you can make an informed decision that supports your business goals.

For expert accounting advice and to ensure your books are in order before you begin the application process, get in touch with Unicorn Accounting.

Why choose Unicorn Accounting?

Ensure you keep on top of your finances and tax obligations by outsourcing to an accountant. This means that you don’t need to worry about your end of year accounts, payroll, or bookkeeping requirements.

At Unicorn Accounting, we are e-commerce accountants who help make your online business a growing success. We offer e-commerce accounting advice, financial management bookkeeping, cash flow statement, and tax filing services to support and scale your business.

Our team of accountants and Xero certified advisors have experience working with both small start-ups and family run online stores to large scale, international retail and e-commerce brands.

If you’ve got an online store, we have the best solution for you. Providing you with a financial arm to your business through our sector experience and skills with innovative technologies. To see how we can help you maximise the scalability of your e-commerce brand all year round, get in touch with Unicorn Accounting today or click here to get a free quote.

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