I make or sell my own products, in stores or online. What are my options?
Pre-orders, supplier credit, rewards crowdfunding, inventory and purchase order finance, platform advances and equity, cheapest first.
A consumer product brand has to pay for tooling, packaging and a first production run months before customers buy, and then fund larger batches as orders come in from online sales or retail chains.
- Pre-orders and the FTC shipping rule: taking pre-orders or deposits lets customers fund production before you pay the factory. When you sell goods online, by mail or by phone and take payment before shipping, the Federal Trade Commission's Mail, Internet, or Telephone Order Merchandise Rule requires you to have a reasonable basis to ship within the time you state — or within 30 days of a properly completed order if you state no time. If you cannot ship on time, you must seek the buyer's consent to the delay or cancel the order and send a full refund promptly.
- Rewards crowdfunding and taxes: a rewards campaign on a crowdfunding platform lets backers pre-buy the first batch of a new product. The IRS notes that money raised through crowdfunding is generally included in gross income to the extent you do not give backers equity, and when backers receive goods or services of value the proceeds are taxable business income (offset by deductible costs you incur in the same tax year).
- Funding larger batches and wholesale orders: once you have repeat sales or a purchase order from a creditworthy retailer, supplier trade credit, SBA working-capital lines, purchase order financing and inventory loans (where banks commonly advance 20% to 65% of eligible finished stock) can fund production without selling shares.
- Platform and revenue-based advances: e-commerce platforms and payment processors offer fast cash advances repaid as a fixed percentage of your daily online or card sales. Because the total fee is fixed up front, a fast-selling season repays the advance in fewer weeks and raises the effective annual percentage rate (APR).
22 routes to look at, cheapest first
Compare the first 4 side by side- L0
Free or nearly free
Little or no cash cost, though most take time and admin. Some bring money in, and a few have small fees.- Own cash and no-cost
Customer prepayments, deposits and pre-orders
Ask customers to pay some or all of the price before you deliver. The cash comes in before your costs go out, so you need to borrow less, but until you deliver you owe customers the goods or their money back.
Days - Own cash and no-cost
Supplier trade credit
Your suppliers let you pay for goods or services some time after you receive them, often 30 or 60 days later. Usually free if you pay on time, but giving up an early-payment discount can make it expensive.
Weeks - Crowdfunding and community finance
Rewards crowdfunding
Raise money online from many backers who get a reward, often the product itself, instead of a share of the business. No repayment or dilution, but you must deliver what you promised, and the money is usually taxable income.
Months
- Own cash and no-cost
- L1
Very cheap or subsidised
Borrowing on better terms than the market, usually because a public body, community lender or large buyer is involved. - L2
Mainstream secured debt
Standard borrowing from banks, credit unions and mainstream lenders, often secured on assets or backed by a personal guarantee.- Government-backed and community lending
SBA 7(a) loans
A business loan of up to $5 million from a bank or other lender, with part of it guaranteed by the SBA, for businesses that cannot get the credit they need on reasonable terms elsewhere.
MonthsUp to $5mPersonal guarantee likely - Government-backed and community lending
SBA Express loans
A loan or line of credit of up to $500,000 from a bank or other lender with SBA Express authority. The lender decides under its own procedures and the SBA guarantees half, so there is less SBA paperwork than a standard 7(a) loan, but the same rate caps and the same rules on who can borrow.
WeeksUp to $500kPersonal guarantee likely - Government-backed and community lending
SBA lines of credit (CAPLines and others)
Bank lines of credit of up to $5 million for working capital, contracts, seasonal peaks or building projects, with the SBA guaranteeing part so lenders will say yes. Rates are capped, but owners usually guarantee the line and the lender watches your receivables and inventory closely.
MonthsUp to $5mPersonal guarantee likely - Bank and mainstream debt
Bank and credit union term loans
A lump sum from a bank or credit union, repaid in fixed installments over an agreed term, usually one to five years. Usually cheaper than online lenders, but slower, and usually secured on assets with a personal guarantee.
WeeksPersonal guarantee likely - Bank and mainstream debt
Business credit cards
Revolving credit for everyday business costs, up to a limit. Free if you clear the balance each month, but expensive if you carry it, and most consumer credit card protections do not apply.
DaysPersonal guarantee likely - Bank and mainstream debt
Business line of credit
A credit limit from a bank, credit union or online lender that you can draw on, repay and draw again, for short-term costs such as inventory, payroll and seasonal gaps.
WeeksPersonal guarantee likely - Bank and mainstream debt
Equipment leasing and sale-leaseback
Paying to use equipment that a lessor owns, with options to buy it at the end, or selling equipment you already own to a lessor and leasing it back to raise cash. Little or no deposit, but you may pay more in total and own nothing at the end.
Weeks
- Government-backed and community lending
- L3
Specialist secured debt
Borrowing secured on specific assets such as invoices or inventory, with more fees and conditions than mainstream debt.- Asset-based and specialist lending
Accounts receivable financing
A loan or line of credit secured on your unpaid invoices. The invoices stay yours, you usually keep collecting from your customers, and how much you can borrow rises and falls with what they owe you.
Weeks - Asset-based and specialist lending
Inventory and floor plan financing
Loans secured on the goods you hold for sale. Dealers of vehicles, boats, equipment and similar goods use floor plan lines that pay for each item and are repaid as it sells; other businesses borrow a smaller share of their stock's value.
Weeks - Asset-based and specialist lending
Invoice factoring
A finance company (a factor) buys your unpaid invoices to other businesses at a discount, pays you for them before your customers do, and collects the money from your customers.
Days - Asset-based and specialist lending
Purchase order and contract financing
Money to fill a specific order or contract you have won but cannot afford to carry out, repaid when your customer pays. The SBA backs one version through banks; specialist finance companies offer others on their own terms.
WeeksUp to $5mPersonal guarantee likely
- Asset-based and specialist lending
- L4
Expensive or fast
Quick to arrange, often unsecured, and usually the most expensive way to borrow.- Alternative and fast debt
E-commerce and payment platform finance
Financing offered by the platform you sell through or take payments with, worked out from your sales there and repaid automatically as a share of each sale. Quick and simple, but only for its own sellers, and a fixed fee can make it expensive.
Days - Alternative and fast debt
Merchant cash advance
A lump sum now in exchange for a share of your future sales, usually collected by daily or weekly withdrawals from your bank account until a fixed total is repaid. Fast, but one of the most expensive ways to raise money.
DaysPersonal guarantee likely - Alternative and fast debt
Online business loans
Term loans and lines of credit applied for online, often from finance companies rather than banks. Decisions can come within days, but rates run well above bank loans, and payments may be taken weekly or even daily.
DaysPersonal guarantee likely - Alternative and fast debt
Revenue-based finance
A lump sum repaid as a fixed share of your monthly revenue until an agreed total is paid back. Payments fall when sales fall, but the total is fixed, so repaying quickly makes it very expensive.
DaysPersonal guarantee likely
- Alternative and fast debt
- Equity rungs. These routes cost no interest, but you give up part of the ownership and control of your business. They are ranked by how much you give up, not by a made-up interest rate. Over time, equity can be the most expensive money of all.E1
Light dilution
You sell a small share of the company, usually to many small investors or people you know, and keep control of how it is run. - E2
Significant dilution and investor rights
Investors take a meaningful stake and usually get rights such as a board seat, a veto over big decisions, or a preferred return.- Private equity investment
Angel investors
Wealthy individuals, alone or in groups, buy a stake in an early-stage company and often bring advice and contacts. It is a securities offering, usually made under the SEC's Regulation D, mostly to accredited investors.
MonthsGives up shares - Private equity investment
Venture capital
Investment from venture capital funds in fast-growing companies, in return for shares (usually preferred stock) and a say in how the company is run. Large sums for growth, but only for a few businesses, and at the cost of ownership and control.
6 months or moreGives up shares
- Private equity investment
Worth knowing
- Before running a rewards crowdfunding campaign or taking pre-orders, price in platform and payment-processing fees, packaging, shipping, returns and taxes using our crowdfunding calculator.
- Try to keep your crowdfunding campaign and the manufacturing outlay in the same tax year so you are not taxed on campaign receipts in one year while deducting production costs in the next.
- When a large retail chain places an order on 60- or 90-day payment terms, compare purchase order financing and invoice factoring with an SBA Working Capital or Seasonal CAPLine before turning the order down.
- Run any e-commerce platform advance through our sales-based calculator at both your normal monthly sales and your peak-season sales so you can see the effective APR and the cash left after your gross margin.
Sources
- FTC: Business Guide to the FTC's Mail, Internet, or Telephone Order Merchandise Rule · checked October 17, 2026
- IRS Tax Tip 2022-120: Some things to know about crowdfunding and taxes · checked October 17, 2026
- OCC Comptroller's Handbook: Accounts Receivable and Inventory Financing (inventory advance rates) · checked October 20, 2026
- Federal Reserve: Consumer & Community Context, March 2025 (small business financing products) · checked October 20, 2026
Facts about each route are sourced on its own page.