Wouldn’t it be nice to apply for a business loan effortlessly? Skip the paperwork and dive deep into Shopify Capital, where eCommerce business owners can apply for funding to make their next big move. No application. No credit checks.
Use your loans or cash advances to either invest in talented employees, restock inventory, or fuel marketing campaigns to build your brand.
What is Shopify Capital?
Shopify Capital is a hassle-free eCommerce financing program for Shopify sellers. It allows users fast access to business loans and merchant cash advances.
It’s a convenient way to acquire capital for Shopify owners who meet the criteria. Shopify Capital funding totals somewhere between $200 and $1,000,000.
This program is available by invitation only. So if you have a Shopify account and don’t see this offer, you’re not eligible to apply for a loan. Shopify Capital is exclusive to sellers with an established sales history on their platform. This offer is available in the United States, Canada, and the United Kingdom.
The process of getting a business loan from traditional lenders is often lengthy. They require you to process lots of official documents, which may take a long time. But with Shopify Capital loans, it’s just one tap on your phone.
Shopify is growing exponentially, serving over 450 million customers in 2020. And many people are making money from this fast-growing eCommerce platform. So why not take the chance to expand your business today.
How does Shopify Capital work?
Shopify Capital program offers business loans in the most convenient way possible to entrepreneurs who meet their standards. They’ll recommend users three different pre-approved amounts of funding. So whichever you choose, the money will go directly into your business bank account in 3-5 business days.
The Shopify capital loans are lump-sum loans, and they come with a fixed borrowing fee depending on which proposal you take. You remit the loan in the course of a year. After that, Shopify automatically deducts your repayment rate from your daily sales until you fully repay the loan.
Shopify Capital has payment milestones to make sure that you pay back the money you owe the platform within 12 months. Your goal is to pay off at least one-sixth of the total amount every 60 days. Here’s an example.
Suppose Shopify offers you $14,000 capital with a repayment rate of $1,040. They’ll take 10% of your daily Shopify sales until you repay your debt within a year. Say you earn $1,500 a day in sales. They take $150 from your account every day. You’ll have to pay at least $2,246.4—one-sixth of the total payment—every 60 days. If you don’t meet your payment milestones, Shopify will debit the money from your bank account.
Sounds overwhelming. So make sure to check your daily sales statistics to ensure that you can reimburse the money you owe Shopify.
What are the pros of Shopify Capital?
Shopify makes applying for a business loan easy, but weighing out their offer before processing is crucial. Here are the advantages of using Shopify Capital.
- Shopify is a reputable company – Since your loan comes from a reliable source, you know the company won’t swindle you into bankruptcy.
- Fast, easy application process – Applying for Shopify Capital doesn’t require having good credit scores and filling out documents. You only have to wait at least five working days for approval.
- Easy monitoring of repayment progress – You can track your payback flow on your Shopify admin dashboard.
- Direct reimbursements from your sales – Shopify automatically deducts repayments based on your daily sales directly from your business bank account.
- Competitive rates – Shopify offers reasonable rates for businesses looking for business loans or cash advances.
If you want to start an eCommerce business, Shopify is the third largest online eCommerce platform in the United States. They offer a free subscription if you’re still hesitant about making a significant investment.
What are the cons of Shopify Capital?
Shopify extends working capital to Shopify business owners with a good sales track record. Though it’s an affordable, trouble-free process, there’s a catch. Go over these disadvantages of Shopify merchant cash advances.
- Shopify Capital is by invitation only – If you already have a Shopify store and have an excellent sales performance history, Shopify Capital will alert you to an offer via email.
- No negotiation – Unlike traditional lending businesses, you can’t work out a payment deal. Whatever Shopify offers, you have no other option. They initiate the whole process, and you don’t have another alternative but to comply.
- Cash flow killer – You don’t square accounts with Shopify on your terms. Instead, they take the repayment from your daily revenue. So if you take the highest bid, they also take a higher percentage of your sales revenue.
Shopify has 90% organic traffic delivering relevant products to relevant customers. With this web traffic plus your strategic promotional ideas, you’re sure to skyrocket your eCommerce business.
How do you qualify for a loan?
Shopify Capital offers Shopify store owners cash advances for future sales investments. They will email you to confirm your eligibility for a Shopify Capital business loan or merchant cash advance. Or you may find the offer on your Shopify admin page.
Shopify won’t ask for any documents, but here are a few details you should know.
Shopify Capital requirements:
- Your store location must be in the U.S., Canada, or the U.K. to get funding from Shopify Capital. However, Shopify Capital loans are only available in certain parts of the U.S. On the other hand, Shopify Capital merchant cash advances are available throughout the U.S. and Canada.
- Your online store must be low risk. It means that your Shopify store is not at risk of fraudulent orders.
- Your online store must use Shopify payments or a third-party payment provider.
- Your online store must have a good sales history.
Critical distinction between a loan and merchant cash advance:
Shopify Capital loans have a fixed borrowing cost where users must meet the 60-day repayment milestones. In contrast, a merchant cash advance is a sum a seller receives in exchange for a fixed percentage from their future sales revenue. Shopify then deposits the loan or cash advance into the merchant’s business bank account.
Basically, one main difference between the Shopify funding program is payment deadlines.
It’s imperative that you pay Shopify loans within 12 months regardless of whether you make a sale or not. Whereas Shopify cash advance doesn’t have a set repayment term.
How do you apply?
You can’t simply send a loan or a cash advance request to Shopify. Instead, they invite you. So to qualify, you must meet the Shopify Capital requirements above.
If Shopify decides you can apply for funding, you only get 30 days to decide if you want to take it. If you don’t accept the pre-qualification offer within this timeframe, you can’t request it anymore.
When you qualify for Shopify funding, here’s a quick step-by-step process.
- Go to Shopify admin page.
- Scroll down to “Additional insights and advice.”
- Click “View funding options.”
- Select the recommended sum you want to take.
If you aren’t ready to take on this venture, there’s also Shopify dropshipping. You can start an eCommerce business from $0.
Conclusion
The Shopify Capital funding program has a lot to offer, and it’s something worth learning if you want to scale your business.
If you get an offer from the company, it’s a smooth, easy way to borrow capital fast. But it’s essential to consider the risks involved in your chosen funding program.
Before diving deep into this endeavor, be sure to understand better how to manage an eCommerce business. There are online eCommerce courses can show you how to get into this industry.
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