This is a guest post from Victoria Sullivan of Payability.
Disclaimer: This post is not meant to be financial advice. It is only intended to outline common financing options for Shopify businesses. There are many other options. So we always suggest you also do research on your own.
If you’re an eCommerce seller looking to grow your online retail business, you’re likely going to need financing. That way, you can invest in things like bulk inventory, new products, or marketing campaigns without disrupting your existing cash flow.
You could try your bank, but keep in mind that the bank financing process is long and tedious, requiring you to compile a lot of paperwork and wait weeks for a response.
In most cases, eCommerce sellers like you have better luck with an online financing provider that’s actually designed to meet your needs. In this post, we’ll be talking about a few such options, including Shopify Capital, Payability’s Instant Advance for Shopify, and more.
Shopify financing options
1) Shopify Capital
Product & Pricing: Shopify Capital offers merchant cash advances and business loans between $200 – $1,000,000. There is no interest, but you’ll have to pay a flat fee by remitting a fixed percentage of your daily sales to Shopify. This means your daily payment amount changes depending on how much you sell on a given day.
Eligibility: If you use Shopify to host your website and/or use their point-of-sale platform, you might be eligible for Shopify Capital. While you can’t apply directly, you’ll see an offer in your Shopify account if you meet their minimum requirements (which are based on your Shopify business history).
Application + Funding: If you see an offer in your account, it means you meet Shopify Capital’s minimum requirements. You’ll then have to complete a simple application to get final approval. Your credit will not be checked as part of this application. If approved, you’ll get a formal financing offer and, if you accept it, you’ll receive funding within two days.
Early Payment Rebate: No
Credit Check: None
Multi-channel Financing: No, Shopify Capital is only available on Shopify.
Other Funding Solutions: No
2) Payability’s Instant Advance for Shopify
Product & Pricing: Payability is dedicated to helping ecommerce sellers get access to fast, friction-free funding, no matter what or how many marketplaces/platforms you use. In fact, Payability works for sellers from Shopify, Amazon, Walmart, Newegg, Tophatter, Etsy, Volusion, and more. With Instant Advance for Shopify, you could get up to $250,000 in as fast as one business day. There is no interest — just a fixed, flat fee. And if you pay back early, you’ll receive a fee rebate.
Eligibility: Payability looks at your entire eCommerce business — i.e. if you sell on more than one marketplace or platform — to see if you meet their minimum qualifications. For Shopify businesses, Instant Advance qualifications are nine months selling history and $2,000 in average sales per month.
Application + Funding: Payability’s simple online application takes less than 10 minutes, requires no paperwork, and no credit check. You can get a decision and funding in as fast as 24 hours once you connect your store and complete the application. And, if you need help at any point during the process, you can get real human support from an account rep during normal business hours (Monday-Friday from 9 a.m. – 6 p.m. EST).
Early Payment Rebate: Yes, a Payability Instant Advance lasts for a maximum of 20 weeks. But, they offer a rebate for every week you pay it back early. So if you pay it back in 10 weeks, you only pay fees for 10 weeks instead of 20.
Credit Check: None
Multi-channel Financing: Yes, Payability offers funding options to eCommerce businesses selling on Amazon, Walmart, Shopify, eBay, Tophatter, Etsy, Newegg and more.
Other Funding Solutions: In addition to Instant Advance, Payability also offers Instant Access or next-day payouts when marketplaces pay on terms. So instead of getting paid every 14+ days for your Amazon sales, Payability can pay you the next day, every day.
Tip: Payability not only works if you sell on multiple marketplaces, it also works if you have existing funding already. For example, if you get a Shopify Capital offer for $5,000, but you really need $10,000, Payability can help make up the difference. And if you get an Instant Access for Shopify but are looking to boost your daily cash flow, Payability’s Instant Access will get you paid daily and in real-time. Learn more at www.payability.com/shopify.
3) More eCommerce Financing Options: Square Capital, Stripe Capital + Fundbox
You may have also heard about Square Capital, Stripe Capital, or Fundbox. The first two — from Square and Stripe, respectively — are very similar to Shopify Capital in that they look at your business history on their platform and, if they like what they see, send you a financing offer on an invite-only basis. If you end up with an approval, you could get funding in as fast as 24 hours and will remit payment via a fixed percentage of your daily sales.
Fundbox is a little different. They offer a revolving line of credit as well as net terms for your customers. And you can apply directly. Their minimum qualifications include $50,000 in annual revenue, three months of invoices, a business bank account and 500 FICO or better.
Which Option is Right For You?
At the end of the day, you’re going to want a financing partner that understands how you run your business, plus why and when you need funding. For example, do you sell on one or many marketplaces? How much financing do you need (and by when)? Do you have consistent cash flow or are payout delays getting in your way?
Understanding these factors will help direct your financing search. If you have further questions about Payability or how Payability can help you grow your Shopify business, visit www.Payability.com/Shopify.