Starting an online business usually begins the same way. You scrape together whatever cash you have, maybe max out a credit card or two, and figure out the rest as you go. Bootstrapping is practically a badge of honor in the e-commerce world. And honestly, it works for a while.
But there’s a moment most online business owners hit where bootstrapping stops being scrappy and starts holding you back.
The Growth Wall
You know the feeling. Sales are climbing. Your product is getting traction. Customers are coming back for more. Everything points to growth, except your bank account can’t keep up.
Maybe you need to place a bigger inventory order to get better margins from suppliers. Maybe you want to finally invest in ads that could scale revenue. Maybe your website needs a serious upgrade to handle more traffic. Whatever it is, the opportunity is right there, but you don’t have the cash to grab it.
This is where a lot of online businesses stall out. Not because the idea is bad or the market isn’t there, but because growth takes money and bootstrapping has limits.
Why Online Businesses Struggle With Traditional Funding
Banks aren’t exactly lining up to fund e-commerce stores and online side hustles. Traditional lenders want to see years of financials, physical assets, and the kind of stability that most online businesses don’t have, especially early on.
According to the Federal Reserve’s 2024 Small Business Credit Survey, only 41% of small businesses that applied for financing received the full amount they requested. The rest were either denied entirely or got less than they needed. For online businesses without brick-and-mortar presence or traditional collateral, those odds can feel even worse.
The result is a lot of business owners stuck in a frustrating middle ground. Too successful to quit, not funded enough to scale.
Options Beyond the Bootstrap
The good news is that traditional banks aren’t the only option anymore.
Alternative lenders and online financing have grown specifically to serve businesses that don’t fit the old-school mold. These lenders look at your actual revenue and cash flow rather than just your credit score and years in business. If your Shopify store is generating consistent sales, that matters more to them than whether you have a commercial lease.
Short-term loans can cover inventory purchases before a big sales season. Lines of credit give you flexible access to funds when opportunities pop up. Revenue-based financing ties repayment to your actual sales, so slower months don’t crush you.
Companies like BusinessCapital specialize in working with small businesses that need funding to grow, including online businesses that banks tend to overlook.
Knowing When It’s Time
Bootstrapping isn’t bad. It forces you to be resourceful and keeps you from taking on unnecessary risk too early. But there’s a difference between being lean and being stuck.
If you’re turning down opportunities because you can’t afford to pursue them, it might be time to explore financing. If you’re losing money by ordering small inventory batches instead of buying in bulk, the math is working against you. If you’ve validated your business model but can’t scale because cash is tight, funding might be the unlock you need.
Growth costs money. Pretending otherwise just keeps you small.
The Bottom Line
Every online business owner has to decide when to shift from pure bootstrapping to strategic financing. There’s no perfect moment, but waiting too long can mean watching competitors grab the market share you could have had.
Funding isn’t about giving up control. It’s about giving your business the fuel it needs to become what you know it can be.
