Finance

What Is an Inventory Line of Credit?

What Is an Inventory Line of Credit?

An inventory line of credit is a flexible financing option for eCommerce businesses. It allows you to borrow money specifically for inventory and business growth, with interest charged only on the amount you use. Here's what you need to know:

  • Quick Access to Funds: Get approved and receive funds in as little as 24 hours.
  • Sales-Based Repayments: Pay back the loan as a percentage of your sales, so payments adjust during slower months.
  • No Personal Credit Check: Approval is based on your store's sales performance, not your personal credit score.
  • Eligibility: Must have $3,000+ in monthly sales, be a U.S.-registered business, and sell on platforms like Amazon or Shopify.

This type of credit is ideal for managing seasonal inventory, covering shipping costs, or investing in marketing to grow your business. Onramp Funds offers a streamlined process tailored to eCommerce sellers, making it easier to maintain cash flow and scale operations.

How Does A Line Of Credit For Inventory Work ...

How Credit Lines Work

This section covers how to get approved, use funds, and understand the cost structure.

Getting Approved

Approval is based on your store's sales performance and metrics, not your personal credit score. The process starts by securely linking your store's data to the funding platform. This read-only connection enables a detailed assessment of your business's health and cash flow needs.

To qualify, you’ll need to meet these requirements:

  • Average monthly sales of at least $3,000
  • Registered as a U.S. business
  • Sell on platforms like Amazon, Shopify, or Walmart Marketplace

"Applied, got our offer, and had cash in our bank account within 24 hours. Their Austin, TX based team was very professional and helped me deploy the cash to effectively grow our business." – Nick James, CEO Rockless Table

Using and Repaying Funds

Once approved, you can use your credit line for key business needs. Common uses include:

  • Buying inventory
  • Covering shipping and logistics
  • Running marketing campaigns

Repayment is tied to your sales deposits, so you pay as revenue comes in. This eliminates fixed monthly bills, making it easier to manage during slower periods while aligning with your business's natural cash flow.

Costs and Security Requirements

Costs are adjusted to your sales performance, easing financial pressure during slower months. Credit limits are calculated based on your sales history through a secure, read-only connection. This approach ensures transparent repayment synced to sales and provides funding without unexpected financial burdens.

With these fundamentals in mind, let’s explore the benefits for eCommerce sellers.

Key Advantages for eCommerce Sellers

These credit line features offer three main benefits for eCommerce sellers.

Quick Access to Funds

With digital integration, approved businesses can receive funds in their accounts within 24 hours of approval.

"Onramp's process is very straightforward and easy to navigate. I had funds in my account within a day of final approval."

Flexible Sales-Based Repayments

Repayments are automatically calculated as a percentage of your sales, which means:

  • They adjust with seasonal revenue changes.
  • Lower payments during slower months.
  • Payments are automated directly from your sales revenue.

Supporting Business Growth

Revolving funds can help you stock up in bulk, handle demand surges, and invest in marketing to boost growth.

"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

Next, we'll dive into key factors to consider before applying for an inventory line of credit.

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What to Know Before Applying

Pros and Cons

Pros:

  • No personal credit checks required.

Cons:

Usage Guidelines

Set the Right Credit Limit
Before applying, take a close look at these factors to determine the credit limit that works best for your business:

  • Your sales history
  • Current cash flow needs
  • Any existing debt obligations

Once you've done that, check out Onramp Funds to see how their funding options align with your business and the platforms you use.

Onramp Funds Solutions

Onramp Funds

Now that we've covered how to prepare for an inventory line of credit, let’s dive into how Onramp Funds supports eCommerce sellers with financing options designed specifically for their needs.

Funding Options That Fit Your Business

Onramp Funds provides revenue-based financing tailored to cover inventory and operational costs for eCommerce businesses. Their repayment model is tied to your sales, making it easier to manage cash flow during both busy and slower seasons - all without giving up equity in your business.

Here’s what they offer:

  • Quick access to funds: Money is deposited into your account within 24 hours of approval.
  • Equity-free capital: Keep full ownership of your business.
  • Sales-based repayments: Payments adjust automatically based on your revenue.
  • Transparent fees: Flat fees range from 2–8% of the funded amount.
  • Dedicated support: Personalized assistance from their team in Austin, TX.

These funds can be used for a variety of needs, like purchasing inventory, covering shipping costs, launching marketing campaigns, and managing other operational expenses.

Onramp Funds securely connects with leading eCommerce platforms, including Amazon, Shopify, TikTok Shop, WooCommerce, BigCommerce, Squarespace, Walmart Marketplace, and Shopline. This integration allows for real-time funding offers and automated repayments linked directly to your sales.

With these financing options and platform connections, Onramp Funds helps you manage inventory, streamline logistics, and fuel your business growth.

Summary

An inventory line of credit offers eCommerce sellers quick access to funds - often within 24 hours. This flexible financing can be used to buy inventory, manage logistics, or invest in marketing. Onramp Funds provides sales-based financing without requiring equity, with repayments tied to your revenue to help maintain steady cash flow. Integrated with top platforms, it helps sellers handle demand surges without depleting their savings.

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