For e-commerce companies looking to fund growth and/or cover seasonal cash flow gaps, finding the right kind of capital can mean the difference between continued growth and filing for bankruptcy. One of the most strategic funding paths is debt financing, particularly when it’s aligned with your business model and growth stage.
At Karlon Group, we work closely with e-commerce brands to build finance strategies that balance growth with sustainability. In this post, we’ll break down how e-commerce companies can approach debt financing based on their growth profile, profitability, and operating history, and how to evaluate traditional bank loans vs. non-traditional lenders like Clearco, Wayflyer, Gynger, and Settle.
Why E-Commerce Companies Should Consider Debt Financing
Debt financing allows e-commerce brands to scale while retaining equity. For companies with reliable cash flows, recurring sales, or strong customer retention (you don’t need all three), debt can be an efficient tool to fund:
- Inventory purchases
- Paid media and customer acquisition
- Technology and infrastructure investments
- Seasonal cash flow gaps
The key is choosing a lender that understands your business model and offers terms that match your goals.
A key element of a debt structure is whether or not it requires a personal guarantee. If a personal guarantee is required, you as the business owner are agreeing to be personally responsible for repaying a business loan if the business itself fails to do so.
Option 1: Traditional Bank Financing for E-Commerce Brands
Traditional lenders like Bridge Bank, Wells Fargo, and JP Morgan offer structured credit at attractive interest rates—but they have high thresholds.
What banks typically require:
- 2–3+ years of consistent operating history
- Positive or near-positive EBITDA
- Clean, GAAP-compliant financials
- Collateral (inventory, A/R, cash flow)
Other considerations:
Traditional banks will also include certain profitability and/or liquidity metrics, called debt covenants, that you’ll need to maintain throughout the life of the debt agreement. Additionally, the lending bank will require that your bank account(s) be held at that bank and, possibly, that your credit cards are issued by them as well.
Personal Guarantee:
It is unlikely that these traditional lenders will require a personal guarantee, but some may require a “limited” personal guarantee up to a certain dollar amount.
Time until funding:
Given the financial diligence the banks will perform, anticipate it taking 8-10 weeks between initial conversations and the funds hitting your bank account.
Best for:
Established e-commerce brands with strong financials, seeking low-cost, long-term capital.
At Karlon Group, we help e-commerce companies prepare for bank credit by optimizing their financial reporting, KPIs, and forecasting to meet underwriter expectations.
Option 2: Non-Traditional Lenders for E-commerce Growth Capital
Fintech lenders like Wayflyer, Clearco, Settle, and Gynger offer fast, flexible capital tailored to e-commerce businesses. They prioritize real-time sales data and customer metrics over profitability or credit history. Their “fixed fee” borrowing structure, term length, and repayment frequency will equate to a higher Annual Percentage Rate (APR) compared to the stated interest rates on traditional bank loans, but that is the tradeoff in working with these non-traditional lenders, who are taking on more risk in lending to young, growing companies.
What they evaluate:
- Shopify or WooCommerce sales performance
- Payment processor trends (e.g., Stripe, PayPal)
- Bank account activity
- Return on ad spend (ROAS), customer lifetime value (LTV), CAC
These lenders offer:
- Revenue-based financing
- Marketing and inventory advances
- Financing of product supplier invoices
- Software/vendor payment credit lines
Other considerations:
Non-traditional lenders may also include a debt covenant, but they are likely to be easier to be easier to reach than those the traditional banks impose.
Personal Guarantee:
It is unlikely that these non-traditional lenders will require a personal guarantee.
Time until funding:
it could take as little as two weeks for funds to be deposited into your bank account.
Best for:
Fast-growing, inventory-heavy, or pre-profit e-commerce brands needing agility and speed.
Karlon Group helps e-commerce founders assess the true cost of non-dilutive capital and determine the right mix of fintech vs. bank debt financing.
E-Commerce Debt Financing: Comparison Table
| Business Profile | Recommended Lender | Why It Works |
| Pre-profit, high growth | Wayflyer, Clearco | Easy access to capital based on sales |
Scaling with strong retention | Bridge Bank + Wayflyer | Blend structure deal + flexibility |
| Profitable and mature | JPMorgan, Wells Fargo | Low-cost credit with large capacity |
| Extending product supplier payment terms | Settle | Short-term, low-ish APR financing |
| High SaaS/vendor expenses | Gynger | Finance software purchases over time |
Key Considerations for E-Commerce Founders and CFOs
When evaluating e-commerce financing options, ask:
- What’s the true cost of capital? Look at APRs, fees, and repayment terms.
- How quickly do I need funds? Banks are slower but cheaper; fintechs are fast but priced at a premium.
- What am I financing? Use inventory-backed loans for stock, revenue-based financing for ads, and SaaS lending for software.
- Do I have fractional CFO guidance? The right partner helps structure financing in a way that won’t limit future growth or trigger cash flow constraints.
How Karlon Group Helps E-commerce Brands Raise Smart Capital
At Karlon Group, we are a leading fractional CFO and accounting firm for e-commerce companies. We specialize in:
- Building investor-ready financial models and forecasts
- Structuring and negotiating e-commerce credit facilities
- Supporting due diligence with banks and alternative lenders – partners we already have relationships with
- Providing full-stack accounting and monthly financials
We’ve helped e-commerce brands navigate everything from seed-stage revenue-based advances to multimillion-dollar term loans with commercial banks.
Ready to explore e-commerce financing that actually fits your business model?
Get in touch with Karlon Group to schedule a consultation.
Final Thoughts: The Future of E-Commerce Lending
The e-commerce lending ecosystem is rapidly evolving. With so many financing options available, from traditional bank loans to growth-friendly fintech lenders, e-commerce companies must take a strategic approach.
The smartest brands aren’t just chasing capital. They’re building funding strategies that align with their operating rhythms, seasonality, and margins. And they’re doing it with experienced partners like Karlon Group by their side.
About the Author:
Sean Scanlon is co-founder and Managing Partner at Karlon Group, a fractional finance and accounting firm that helps companies build, scale, and optimize their finance and accounting functions. Karlon Group works with companies across SaaS, consumer, manufacturing, and technology, offering a full suite of finance and accounting support tailored to each client’s changing needs.