Debunking Shopify Capital, a viable method for business funding

Whether starting a new business or wanting to expand one, getting financing from traditional sources is tedious and almost impossible to obtain without significant collateral. Alternative sources may be more timely, yet, they will feel more dubious than the established brick-and-mortar local bank. Since 2016 Shopify Capital has made over $4B available to Shopify businesses with accessible funding ranging from $200 to $2M.

Shopify Capital revealed

Merchant Loans and Cash-advanced are available to eligible businesses on the Shopify platform. Your eligibility is usually displayed in an Email to the Shopify store owner, and will also be displayed in the Shopify Admin area. Shopify Capital is different in sizing and seeing opportunity and the below will show how these business loans will differentiate this eCommerce platform.

The Myths:

I. Business funding pushes your online store into further business debt, however, Shopify Capital takes a different approach:

• Eligibility is based on Sales: Most traditional business applications take a lot of paperwork, whereas Shopify Capital already knows your business and uses "Machine learning" as a tool to size up your business online.
• No personal credit score or checks: The application only looks at the business performance.

II. Business funding might require giving up ownership: This could add additional risk to business performance, customer service, and even cash flow if a new interfering entity tries to steer the ship in a different direction. This can lead to a bad experience, affecting daily sales and affecting the customer service experience. This is not a venture capitalist program, and Shopify Capital is not looking to have shares in return for supporting your business. Shopify Capital has measured an increase of 36% in sales following 6 months of receiving a loan vs. their peers and the competition.

III. Business loans are for bad credit stores - no, they are not! Shopify Capital loans aim to help businesses with Shopify websites to overcome hurdles in order to help them get through difficult situations where their product and services are viable and have a great customer service reputation. A successful Shopify store at times gets into an inventory crunch due to unforeseen logistics, or production schedule misalignments. With traditional lending, it may take weeks before you get to hear a decision and will require personal guarantees and collateral all the while your length of doing business may be too short for their comfort level. Shopify Capital loans can approve you in as little as 2 business days, which you can then move to overcome the immediate challenge that you are looking to solve. Shopify Capital Terms do not have fixed terms or milestones unlike banks, it is based on daily sales where a percentage pays back the loan. The more you sell, the quicker the Shopify Capital loan is paid back.

IV. Cost of the business funding is too high? Shopify Capital is different. Traditional lenders have an application fee, monthly fee, annual fee, and interest rates. With an increase in inflation and interest rates raising fast, the cost of lending from Shopify Capital has remained steady. Shopify Capital has a fixed fee for the life of the loan, and will not change over time - no matter the duration it may take to pay it back. You don't have to be a top Shopify store to qualify or one with a stellar website design.

V. The funding amount may not be able to help your business. Your online store sales determine your eligibility for the amount you can apply for. The greater the sales, the higher the amount. There are no terms on how or what you spend it on - as long as it is based on your business. Purchasing in inventory, marketing, cash flow, new markets, and new products are all part of what most businesses put the amount of borrowed funds towards. This particular loan approach allows you to push harder and get ahead while you can plan your next bigger move. Sometimes, it takes that small push to achieve the next level of growth you are looking to achieve. It may not be the next level of equipment for your manufacturing floor, but improving your sales might be the funding cash flow you are needing to get that item. This loan is more strategic in the sense it unlocks your potential so as to get your balance and get your strength back.

Conclusion

Shopify Capital is available to all Online stores, it is fast and flexible, and your eligibility can be seen in the Shopify Admin under Shopify Capital. Results will vary for every merchant based on their sales history. All loans are issued by WebBank. Therefore for any merchant that needs that small push in the nick of time, then why not consider Shopify Capital over the traditional banks, and get the small push you are looking for and get the results you are aiming for? For all other web-related challenges in digital marketing or digital services, feel free to reach out to us at wish@thegenielab.com