Finance for ecommerce businesses
Platforms like Shopify and lenders like Wayflyer let ecommerce businesses scale fast, from inception to an established brand. The right finance product changes as you do.
Since the rise of lenders like Wayflyer and platforms like Shopify, ecommerce businesses have a real ability to scale from inception to a relatively established business faster than most other industries. But the finance that gets you off the ground isn’t the finance that should still be funding you a year or two later, and staying on it longer than necessary costs real money.
The natural progression: from RBL to overdraft, line of credit or invoice finance
Most ecommerce businesses start on revenue-based lending for their first one to two years. It’s fast, it’s accessible without much trading history, and it’s matched to the ad-spend-and-inventory cycle new stores run on. Once a business becomes established, the transition to overdrafts, lines of credit, and, for businesses with a B2B distribution arm rather than pure B2C, invoice finance, can save a genuinely significant amount of money compared to what you’d keep paying in the revenue-based lending space.
Revenue-based lending
Fast to access, minimal trading history required, priced against your revenue rather than your financials. The right fit while the business is still establishing consistent numbers.
Overdraft, line of credit, or invoice finance
Once turnover is consistent and financials are clean, these products are materially cheaper than staying on RBL. Invoice finance specifically suits businesses with a B2B distribution side, not just direct-to-consumer sales.
What it takes to graduate to the cheaper products
Like any retail business, lenders want to see consistent cashflow. As you move into the more premium-priced products, they’ll also want clean financials and a well-managed ATO account. It’s possible to access these products without ticking every one of those boxes, but the price goes up accordingly, the same trade-off that applies across every other product category.
- 01Consistent cashflow over time, not a single strong month, is what lenders in this space are actually assessing.
- 02Clean financials become more important the further you move toward the cheaper, more premium-priced products.
- 03A well-managed ATO account matters more than most sellers expect once you’re being assessed for overdrafts, lines of credit or invoice finance.
Revenue-based lending
The right starting point for newer stores without the trading history for cheaper products. Fast, accessible, and matched to revenue.
Overdrafts & lines of credit
Cheaper working capital once cashflow is consistent and financials are clean, no ongoing debt if you don’t draw on it.
Invoice finance
For ecommerce businesses with a wholesale or B2B distribution arm alongside direct sales, funding the gap on customer payment terms.
If your store has moved past its first year or two and your financials have caught up, staying on revenue-based lending is likely costing you more than it needs to.
| Business stage | Typical fit |
|---|---|
| New store, limited trading history | Revenue-based lending |
| Established, consistent cashflow, B2C | Business overdrafts or lines of credit |
| Established, B2B distribution alongside B2C | Invoice finance |
| One-off need, e.g. inventory or equipment purchase | Unsecured business loans or asset finance |
Why work with a broker instead of comparing lenders yourself?
Knowing when your business has actually reached the point where it can graduate off RBL, and which lender will price the next product correctly for your specific financials and ATO position, isn’t always obvious from the outside. A broker who works across both spaces can tell you honestly whether you’re ready to move, and negotiate the transition rather than you working it out lender by lender. (More on how a business loan broker actually works.)
When staying on RBL is still the right call
If your financials aren’t clean yet, or your ATO account isn’t well managed, moving too early to a cheaper product can mean a lender declines you or prices it up regardless, at which point you’ve spent time and effort for no real saving. Sometimes the honest answer is to keep building a clean trading history for another few months before making the switch.
Still paying revenue-based lending rates?
Tell us how long you’ve been trading and what your financials look like and we’ll tell you honestly whether you’re ready to move to a cheaper product.
Give us the basics below and Andrew will come back with the two or three offers actually worth your time, usually within a business day.