Bridge loans are a fast, flexible financing option for eCommerce businesses needing quick cash to cover expenses like inventory, shipping, or marketing. Unlike traditional loans, they offer same-day funding and revenue-based repayment, meaning payments adjust with sales performance. Here's what you need to know:
- What They Are: Short-term loans bridging cash flow gaps until long-term funding arrives.
- Key Features:
- Approval and funding within 24 hours.
- Repayment based on a percentage of sales.
- Use for inventory, marketing, or operational costs.
- Requirements:
- Pros:
- Fast funding.
- Flexible repayment tied to revenue.
- Cons:
- Higher interest rates than long-term loans.
- Payments can strain cash flow during slow sales periods.
Bridge loans are ideal for seasonal sales, bulk inventory purchases, or covering supply chain costs. Evaluate your sales trends and cash flow before deciding if this option fits your business needs.
Understanding Bridge Loans
What is a Bridge Loan?
Bridge loans provide fast funding for eCommerce businesses, helping them manage operations while waiting for long-term financing. These loans stand out because they use a revenue-based repayment system. Instead of fixed monthly payments, repayments adjust based on how well the business performs.
Main Bridge Loan Elements
Bridge loans come with features tailored for online sellers:
| Element | Description |
|---|---|
| Funding Speed | Approval and funding within the same day or 24 hours |
| Repayment Structure | Payments based on a percentage of sales, not a fixed amount |
| Usage Flexibility | Can be used for inventory, shipping, marketing, or other business needs |
| Platform Requirements | Requires sales through major eCommerce platforms |
| Minimum Qualifications | At least $3,000 in average monthly sales |
| Business Requirements | Must be a legal business entity in the U.S. |
These elements make bridge loans a practical option for eCommerce businesses looking for short-term financial solutions.
When to Use Bridge Loans
Bridge loans are especially helpful in situations eCommerce businesses often face:
- Inventory Purchases: Take advantage of bulk discounts or time-sensitive deals.
- Seasonal Sales: Prepare for high-demand periods like the holidays.
- Marketing Campaigns: Boost advertising for major shopping events.
- Supply Chain Costs: Cover shipping, logistics, and other operational expenses.
"Onramp's process is very straightforward and easy to navigate. I had funds in my account within a day of final approval."
"Onramp has simplified cash flow by automating everything: easy to request, set it and forget it payments - quick and fast!"
Getting Approved for a Bridge Loan
Requirements
To secure an eCommerce bridge loan, your business needs to meet certain criteria related to its structure and sales platform:
| Requirement | Details |
|---|---|
| Business Structure | Must be a registered U.S. entity (LLC, Single-Member LLC, C-Corp, or S-Corp) |
| Platform Integration | Active seller account on platforms like Amazon, Shopify, Walmart, BigCommerce, WooCommerce, Squarespace, or Shopline |
Once these conditions are met, gather the required digital documents to streamline the approval process.
Required Documents
After confirming eligibility, prepare the following documents to ensure a smooth review:
- Read-only access to your eCommerce store for performance evaluation
- Business bank account connection for verification purposes
- Key business details, including:
- Registration information
- Sales history
- Current cash flow
- Any existing debt obligations
This online process ensures quick evaluations while maintaining data security.
Time to Funding
Once you've submitted everything digitally, the process moves quickly, with funding typically completed within one business day:
| Stage | Duration |
|---|---|
| Initial Store Connection | A few minutes |
| Pre-qualification | Instant |
| Bank Account Connection | A few minutes |
| Final Approval | Same day |
| Fund Disbursement | Within 24 hours |
This efficient timeline makes bridge loans an excellent option for keeping your eCommerce business running smoothly.
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Bridge Loan Pros and Cons
Knowing the ups and downs of bridge loans can help eCommerce businesses make smarter financing choices. Here's a closer look at the key points to consider.
Benefits
Bridge loans can be a fast and flexible solution for eCommerce businesses in need of quick cash. With funding often available in as little as 24 hours, businesses can act on time-sensitive opportunities. The repayment model, which is tied to revenue, adjusts based on sales, making it easier to manage. Plus, automated payment systems simplify cash flow management.
"Onramp's process is very straightforward and easy to navigate. I had funds in my account within a day of final approval." - Adam B., The Full Spectrum Company
These perks, however, come with some trade-offs that businesses should weigh carefully.
Drawbacks
While bridge loans can be helpful, they come with challenges:
- Cost Structure: Interest rates are higher compared to long-term financing options.
- Repayment Timeline: Short repayment periods demand careful planning.
- Sales Impact: Payments tied to revenue can strain cash flow during slow sales periods.
- Eligibility Standards: Businesses must meet specific platform and structural requirements.
Side-by-Side Comparison
| Aspect | Benefits | Drawbacks |
|---|---|---|
| Speed | Funding within 24 hours | Quick repayment expected |
| Flexibility | Revenue-based repayment | Payments fluctuate with sales |
| Requirements | Simple digital application | Must meet platform criteria |
| Cost Structure | No equity dilution | Higher interest rates |
| Business Impact | Quick access to growth capital | Requires steady revenue |
| Process | Automated payments | Regular performance monitoring |
The suitability of a bridge loan often hinges on your specific business needs and growth plans.
Onramp Funds Bridge Loan Options
Onramp Funds provides loan options designed specifically for eCommerce businesses, focusing on quick funding and repayment flexibility. Their approach tackles common issues online sellers face, offering solutions to help manage cash flow and support business growth.
Sales-Based Repayment
With Onramp Funds, repayment is tied directly to your sales. Instead of fixed monthly payments, the amount you repay adjusts based on your revenue. When sales are high, you pay more; during slower periods, you pay less.
This system uses a set percentage of your sales revenue, making cash flow easier to manage. Plus, the automated setup ensures everything runs smoothly, letting you focus on growing your business.
24-Hour Funding Process
Need funds fast? Onramp Funds promises funding within 24 hours. Here’s how it works:
- Fill out a quick questionnaire for an initial estimate.
- Connect your store and bank securely.
- Receive your funds.
Platform Compatibility
Once funded, integration with your eCommerce platform is hassle-free. Onramp Funds supports a variety of platforms, including:
| Platform Type | Supported Marketplaces |
|---|---|
| Major Marketplaces | Amazon, Walmart Marketplace |
| eCommerce Platforms | Shopify, BigCommerce, WooCommerce |
| Website Builders | Squarespace |
| Social Commerce | TikTok Shop |
Eligibility requirements apply, as mentioned in the Getting Approved section.
Making the Right Choice
Take a close look at your current needs, sales trends, timing, and growth stage to decide if a bridge loan aligns with your eCommerce funding goals.
Evaluate Your Business Needs
Bridge loans offer quick access to funds, which can be useful when you need to:
- Stock up on inventory to meet growing demand
- Kick off marketing campaigns to boost sales
- Improve logistics for quicker deliveries
- Expand operations during periods of rapid growth
Assess Your Sales Patterns
Check your sales history to confirm that a revenue-based repayment plan works with your business cycle, allowing for adjustments during slower months.
"Onramp has simplified cash flow by automating everything: easy to request, set it and forget it payments - quick and fast!"
– Torrie V., Founder and Owner of Torrie's Natural
Understanding your sales trends can help you pinpoint when fast funding would be most advantageous for your business.
Consider Timing and Growth Stage
Bridge loans can be especially helpful in specific business situations:
| Business Situation | Why It Helps |
|---|---|
| Seasonal Peaks | Provides funds to stock up for busy periods |
| Rapid Growth | Offers quick capital to support scaling efforts |
| Market Opportunities | Enables fast action on new opportunities |
| Cash Flow Gaps | Allows flexible repayment to cover temporary shortages |
Impact on Business Growth
Picking the right financing option is key to driving your business forward. Onramp Funds notes that their clients see a +0% increase in revenue within 180 days of receiving funding.
Take time to review your cash flow, existing debts, growth plans, and seasonal trends to ensure a bridge loan is the right fit.
