Top 7 Capital Loans for Scaling Your Dropshipping or Shopify Store

Your Shopify store makes a sale, then hits a cash slump. You need working capital to buy products, to grow ad spend, to cover fees. Many owners juggle credit cards, bank loans, credit lines, and merchant cash advances.

A cash gap can stall your growth.

Did you know Shopify Capital takes a share of daily sales, with no extra interest? We list seven top capital loans for dropshipping and Shopify stores, from SBA loans to equipment financing.

You will see the pros, the cons, the rates, and tips to qualify. Keep reading.

Key Takeaways

• Shopify Capital and merchant cash advances offer fast cash. You can borrow from $200 up to $2 million. You repay by giving a fixed share of daily sales. Shopify Capital charges no compound interest and ends payments in up to 18 months with two six-month periods. You get approval in one to three days. Rapid Finance and Reliant Funding can fund you in a day with no collateral or high credit score.
• Business lines of credit and online term loans give flexible funding. After three months, you can draw up to $150,000 and pay interest only on what you use. Fundbox approves in 15 minutes. OnDeck offers $5,000–$250,000 loans over 3–24 months. Kabbage lends $2,000–$250,000 in days. Lendio links you to SBA and 75 other lenders with funding in 24–72 hours.
• SBA loans suit e-commerce shops with solid records. The 7(a) program gives up to $5 million for working capital. The 504 program offers up to $5.5 million for fixed assets. Microloans cap at $50,000 (avg $13,000) over six years. You need credit scores above 650, two years of sales history, a detailed business plan, and a personal guarantee. Expect a 60–90 day approval process.
• Crowdfunding taps many small backers. Use Kickstarter or GoFundMe for rewards or donations. Use StartEngine or Crowdcube for tiny equity stakes. Platforms charge fees around 3%–10%. Vicky Pasche raised $26,000 on Kickstarter, beating her $18,000 goal. You trade marketing work for funds and brand buzz.
• Equipment financing helps you buy machines or tech gear. Banks and Taycor Financial offer loans or leases at 4%–45% interest. Your new gear acts as collateral, so you avoid extra assets. As you pay, you build business credit and keep cash free for inventory or ads.

What is Shopify Capital and how does it work?

Shopify Capital offers loans from $200 to $2 million. Repayment takes a fixed share of daily sales. Merchants pay no compound interest and finish in up to 18 months, with two payments per six months.

Approval takes one to three days, without collateral or a personal guarantee. Automatic deductions from card payments ease cash flow management.

It checks store data like credit history, sales history, and a business plan to gauge creditworthiness. The admin tool links directly to sales info for working capital planning. Many merchants weigh other fintech funders, such as Payability, Clearco, that lender, Stripe Capital, or Fundbox, to compare merchant cash advance terms, term loans, or a business line of credit.

What are merchant cash advances and who should use them?

A merchant cash advance, often called an MCA, gives your store a lump sum in exchange for a slice of future card sales. Providers like Shopify Capital, Rapid Finance, and Reliant Funding deliver funds in as little as a day.

You repay through a percentage of daily transactions, not fixed monthly payments. Total payback can hit 150 percent of what you borrowed. This option stays unsecured so you need no collateral.

Even a low credit score won’t block approval.

E-commerce shops and drop-shipping outfits suit this quick-cash solution. You link your payment gateway or card terminal and the provider pulls its share automatically. This form of business loan skips a lengthy underwriting cycle.

It frees up working capital for new inventory, ads, or payroll. Your point-of-sale system feeds real-time sales data to the provider. Fast funds and flexible repayment appeal to merchants who juggle uneven cash flows.

How can a business line of credit help your store grow?

Small shops can tap a business line of credit after three months in operation. It works like a store credit card, interest applies only to the funds you draw. Some online lenders, such as Fundbox, grant approval in as little as 15 minutes and extend up to $150,000 in revolving funds.

This flexibility helps with cash flow management and covers inventory financing or sudden order spikes. Hillary Markenson of Reverie hails its ease for steady businesses.

Businesses may choose secured or unsecured credit lines to match risk and budget. Providers span fintech companies, credit unions, and peer-to-peer lending networks. They set fees and interest rates differently, so compare options.

Fast approval apps speed up funding, making it easier to invest in ads, stock, or seasonal deals.

What are the best online loan options for dropshipping businesses?

E-commerce sellers can tap online loans for fast cash. OnDeck delivers $5,000 to $250,000 loans in 3 to 24 months and can approve some applications the same day. Fundbox hands out a business line of credit up to $150,000 with 15-minute approval and weekly repayments.

Kabbage issues $2,000 to $250,000 term loans that fund in days and aid cash flow management.

Lendio connects to the Small Business Administration and 75 other lenders. It offers SBA loans, lines of credit, and term loans with funding in 24 to 72 hours. Payability advances up to 80 percent of daily sales, skips credit checks, and delivers funds on the spot.

These options carry higher interest rates, shorter terms, and clear repayment plans, so you get working capital without a long loan application.

SBA loans for e-commerce businesses

You can tap the SBA’s 7(a) funding deal or get a mini loan to buy gear or stock. Use the SBA Lender Match tool and local small business centers to craft a strong application.

What types of SBA loans are available for online stores?

Small Business Administration (SBA) offers three main loan options for online stores. These paths match common e-commerce financing needs.

1. 7a loan program offers up to $5 million for business financing like working capital or inventory financing. Applicants send a business plan, sales history, and credit report to the SBA for approval.
2. 504 loan program provides up to $5.5 million for fixed assets, such as equipment or warehousing. Applicants work with certified development companies and present financial statements, revenue growth projections, and a solid credit score.
3. Microloan program grants up to $50,000 with an average of $13,000 and a six-year term. Entrepreneurs tap nonprofit community lenders or small business development centers for online loans, using funds for startup costs or digital marketing.

How do you qualify for an SBA loan for e-commerce?

Your store needs a strong business credit history and solid sales. Lenders look for steady cash flow and a firm business plan.

• Show a detailed business plan with projected budgets and marketing plans. Include profit and loss statements and working capital needs.
• Maintain credit scores above 650 for both personal and business profiles. Lenders will pull your TransUnion, Equifax, and Experian reports.
• Provide at least two years of documented sales history. Positive cash flow management proves your store can handle loan repayments.
• Display relevant industry experience. Lenders often favor e-commerce entrepreneurs with past Shopify or dropshipping track records.
• Prove ownership with a personal guarantee and real assets. The U.S. Small Business Administration and most banks require collateral for larger amounts.
• Use help from Small Business Development Centers (SBDCs) or a credit union financing adviser to prepare financial statements and business forecasts.
• Expect a 60 to 90 day application process. The U.S. Small Business Administration requires extra underwriting and may involve site visits.
• Avoid being new on Shopify’s platform with little to no revenue. Most SBA loans reject stores that lack a positive cash track record.

How can crowdfunding platforms fund your Shopify or dropshipping store?

Crowdfunding platforms let you raise small sums from many backers, pooling funds for your shop. Kickstarter and a similar crowd campaign site link entrepreneurs with eager fans. GoFundMe uses a donation format to rally support around causes or products.

Rewards-based sites offer perks like early samples or branded swag to entice pledges. Equity hubs such as StartEngine and Crowdcube back projects with tiny ownership stakes, supporting equity financing for young stores.

That path boosts brand awareness and community engagement for shops with little or no revenue, but fees and marketing work demand time.

Rock-solid pitches and nonstop social pushes drive wins on these platforms. Vicky Pasche hit $26,000 on Kickstarter, beating her $18,000 goal for Dapper Boi. Platforms take fees, and push merchants into email blasts, live demos and video updates.

This hustle rakes in funds for inventory financing, gear buys or ad budgets. Shopify merchants swap debts or venture capital for community backing and bright buzz.

What equipment financing options exist for e-commerce businesses?

Shopify merchants can opt for equipment financing to buy machines or tech gear. Lenders such as banks and Taycor Financial offer term loans or leasing plans. The gear itself stands as collateral, so you avoid extra collateral demands.

Interest rates range from 4 percent to 45 percent, and you build your business credit history as you pay.

These business loans ease cash flow management, you spread out interest payments and keep working capital free for inventory or ads. Funds only cover hardware or software, so watch out for overpaying.

Asset depreciation can erode your gear’s resale value. Even companies with thin credit can land a plan.

How can you qualify for these capital loans?

Good credit opens loan doors. A clear plan wins lender trust.

1. Check your credit history and aim for a score above 670 to meet lender thresholds.
2. Gather key documents such as tax returns, bank statements, and financial statements for loan review.
3. Show strong revenue growth from sales or data in accounting software or payment processor to impress funders.
4. Prepare all parts of a pitch, including an elevator speech, business plan, and financial model for SBA or private lenders.
5. Build extra working capital in your account to prove cash flow management skills and repayment ability.
6. Compare loan types such as term loans, merchant cash advance (MCA), business line of credit, and equipment financing for best fit.
7. Use private lenders, credit union financing, or small business administration options based on your needs and credit profile.
8. Seek lenders like revenue advance service that base approval on sales volumes instead of strict credit checks for fast capital.
9. Contact small business development centers or nonprofit groups for grant advice, training, and help with business credit.

What tips help you choose the right loan for your store?

Each option holds its own costs and rules. You must match loan features to your store.

1. Set precise borrowing amount. Map your inventory, ads, and payroll needs to avoid under or overfunding.
2. Match term to funding goal. Use short terms for inventory restock and long terms for equipment financing plans.
3. Compare interest rates. Online term loans run 14% to 99%, lines of credit charge 10% to 99%, merchant cash advances span 40% to 350%, SBA fixed loans hit 12.5% to 15.5%, and variable loans sit at 10.5% to 14%.
4. Factor origination fees. Lenders take 0.5% to 8% off your principal at closing.
5. Watch prepayment penalties. Some banks and credit unions limit early payoff and tack on extra fees.
6. Review lender type. Banks give lower rates but strict vetting, fintech companies move fast with higher APR, and government agency programs like SBA loans offer solid terms with more hoops.
7. Check cash flow impact. Merchant cash advance payouts draw from daily sales, invoice financing grabs a cut up front, and lines of credit let you draw funds only as needed.
8. Verify credit history effect. Self-funding or loans from friends won’t build business credit; term loans, business line of credit, and SBA loans help you grow a solid record.
9. Use accounting tools. Link QuickBooks and Stripe reports or tap the Shopify Capital dashboard to track repayments and manage cash flow.
10. Prepare solid documents. Lenders want financial statements, a clear business plan, and proof of revenue growth before they say yes.

Takeaways

Think of your store as a ship, and capital sources as winds in your sails. Shopify Capital, Small Business Administration loans, and merchant cash advance unlock bursts of fuel for your next voyage.

Smart tools like a detailed business plan, profit and loss statements, and cash flow management keep you on course. A business line of credit handles sudden storms in inventory and marketing.

Crowdfunding sites and equipment financing serve as friendly ports when you need fresh cargo. Pick the right loan by checking interest rates, repayment terms, and real revenue growth.

Keep your ship steady, pay on time, and watch your dropshipping store chart a new course to success.

FAQs on Capital Loans for Scaling Your Dropshipping or Shopify Store

1. What is Shopify Capital?

Shopify Capital is a built-in shopify financing tool for shopify merchants. It gives money fast, it shifts with your cash flow management.

2. How do sba loans work for my shopify store?

sba loans come from the us small business administration (sba), they are term loans with low interest rates. They help your shopify store scale by supporting inventory and marketing costs.

3. What is better, a merchant cash advance (mca) or a business line of credit?

A merchant cash advance (mca) gives you a lump sum, you pay it from future sales. A business line of credit is a pool of funds you tap as needed. MCAs may trigger chargebacks and debit card fees, while lines may reward you with cash back.

4. How does inventory financing differ from equipment financing?

Inventory financing covers the goods you sell, it frees up working capital. Equipment financing pays for tools you use, like printers or scanners. Both help with startup funding in tight cash flow times.

5. Should I pitch to angel investors or venture capitalists for equity financing?

Angel investors or an angel investor can add a personal touch, they invest early and share your vision. Venture capital (vc) firms or vcs bring cash and connections, but they may want control. Both paths can fuel business growth, they shape your finances and boost revenue growth.

6. Where can I find small business grants and other support?

Small business development centers (sbdcs) and nonprofit organizations guide you on a business plan and financial statements. Some fintech companies or credit union financing offer incentives or online loans. You can also apply for personal loans, and use your business credit history to qualify for small business grants.