How does an eCommerce business loan work?

eCommerce business loans provide quick, flexible financing to online sellers based on their digital business performance and metrics. The application and repayment process is seamless through digital channels.

Here is an overview of how eCommerce business loans work:

• The online seller applies through the lender's website or app by providing basic business details and Know Your Customer (KYC) documents.
• Eligibility is assessed based on annual online revenue, sales on marketplaces like Amazon/Flipkart, business vintage and credit score/report.
• Once approved, the loan amount is disbursed within a few working days directly to the applicant’s account.
• Loan amounts can range from a few lakhs to several crores based on business size and financing needs.
• Average tenures up to 3-5 years may be provided with flexible repayment options.
• Loans are usually collateral-free, but loan providers may ask for collateral for security.
• Interest rates are higher than traditional business loans but competitive for the eCommerce sector.
• Repayment is made monthly via Equated Monthly Instalments (EMIs) by auto-debiting the linked bank account.
• The entire process, from application to disbursal and repayment, is digital and paperless.
• Minimal documents are needed as lenders rely on online business data for underwriting.