In this world of modern technology, we are bombarded with adverts about all manner of things. Chances are you have come across Shopify whilst browsing the internet. But what exactly is it?
Shopify is an online software program where business owners can set up online shops in order to sell their products. Users pay a monthly subscription fee and also have the option to use a physical space using POS, the eCommerce companies app.
Shopify encompasses several things and exists in order to help people sell products and services quickly and simply. Whether you are an established shop owner wanting to move your business online or a new business hoping to start trading from a physical space, Shopify has a solution for you.
How Does It Help Business?
Shopify functions by streamlining your commerce needs right into a single main area. If you’re a Shopify vendor with both an online as well as a physical presence, you can sync your stock and inventory into one account using one device.
This simplifies the whole process and makes managing your business easier.
With Shopify, sellers can develop and customize an internet shop and can market in several different places at once. They can sell products online, via mobile devices, physical markets or real life shops.
Shopify is entirely cloud-based and hosted which means it can be accessed from anywhere through a connected device. This creates flexibility and the ability to work whenever and wherever you are physically located.
On any given day, a local business owner can show products, engage with clients, make money, ship a product, as well as handle their daily funds and operations. Some companies may use multiple tools to manage all the tasks involved in their business which takes up a lot of time and money.
Conversely, an e-commerce programme collects the business’ singular technologies together and provides one simple tool that can integrate everything in one easily accessible place.
What Is Shopify Capital?
Shopify Capital is a company financing program through which Shopify vendors can obtain quick access to loans and also seller cash advances. The financing is available by invitation just for vendors that have a recognized background in Shopify sales.
Shopify Capital is a principle that first showed up in 2016. Similar to PayPal Capital, or Square Resources, Shopify’s Resources solution gives business leaders access to a specific lending amount, based upon what the website currently knows about that business’s revenue as well as money-making potential.
Shopify Funding is budget-friendly in comparison to other loan providers. While it’s not as economical as other conventional loan providers, if you need some fast resources for your organization, Shopify Resources could be an excellent alternative.
More than 1 million eCommerce companies use Shopify, boasting over 300 million consumers. There’s a large diversity of local businesses on the system. Shopify Capital can assist merchants to grow their services and increase sales.
Whether you need some upfront cash to purchase equipment or are recovering from the effects of Covid, getting a loan could be just what you need to advance your business and make it into something lucrative for you and your family.
Pros And Cons Of Shopify Capital
There are several pros and cons to using Shopify Capital so let’s consider a few.
- Super easy application process and easy to access funding
- Lots of different amounts are available
- An alternative to other ways of accessing finance
- Cheaper than cash advances and another way of accessing short term loans that are less expensive.
- Daily sales dictate monthly repayment amounts
- Easy to trach repayments on the Shopify dashboard
- Lower interest rates
- Quick application process and daily support
- Reputable company
- You must be a Shopify seller to apply
- A personal guarantee must be signed to protect Shopify in the event you can’t pay back the loan
- Every day debits will be taken from sales to cover repayments (relative to sales)
Shopify Capital Qualifications
To find out if you qualify for a Shopify Capital loan you need to look through their terms and conditions. Sadly, not everyone is eligible and it depends on several factors. Unlike other ways of obtaining credit, you can’t just make an application to find out if you are eligible.
You have to wait for Shopify to approach you and identify you as being eligible to apply for the loan. So, the only way to find out if you are eligible is to sit and wait for a message.
Shopify will contact you and inform you of how much you are eligible to apply for. Simply put, if you don’t get a message you are not eligible. So, what is the criteria based on? There are several factors such as:
- Store location
- Business risk
- How many sales are processed
- Do you use Shopify payments
Presently, Shopify loans are only available to business owners in the US. But the advance cash payments are available to those in the US and Canada.
How The Deposits And Payments Work
One of the most vital points to note about Shopify Funding is that the vendor cash advance isn’t financed. There is no interest added and there are no official deposits and payments. You pay it each day based on the sales your business makes.
Shopify doesn’t give a deadline, you just continue to pay them out of your earned money until the debt is paid off. This certainly reduces any pressure and allows you to build your business in your own time without worrying about paying back the loan by a certain time.
If you choose the short-term loan option for local business owners, as opposed to the merchant cash loan, then the main significant distinction is that you must adhere to a certain payment amount.
Shopify Capital uses a simple way to gain access to money without an overwhelming rate of interest and extra costs. Not being tied to a settlement date with the seller cash advance is a significant advantage.
Nevertheless, it may be worth considering other funding options for some businesses. A loan may be the very best choice for some company firms and retailers.
Advance Requirements & Legal Aspects
It’s useful to know that just because Shopify has contacted you regarding the loan you won’t necessarily receive it. You would certainly presume that any individual that has been contacted would certainly be approved. Nonetheless, that’s not always the case.
When you apply for Shopify funding, the admin group will go through your application and may decide to decrease or increase the amount you can request. The admin group can additionally reject your request for financing during the underwriting process.
Although you can not discuss your pre-qualified quantities with Shopify if you require extra funding there are ways to achieve this. If you are accepted for funding initially you may be able to apply for more funds. Again, you will only know this by waiting for Shopify to contact you.
Shopify Capital Terms & Fees
If you’re lucky enough to receive a message from Shopify informing you that you can apply for a loan, the amount will be valid for 30 days.
It’s useful to remember that they are constantly evaluating businesses to ensure that they are still eligible and not posing a risk. So don’t assume that you will be eligible indefinitely.
If you go past the 30 days without applying or Shopify decides to revoke the, then you will no longer be able to ask for the same amount. At this point, if you are eligible for anything it will show up on the main page of your Shopify account.
To start the application process find the message you received on your Shopify account and click request on the financing choice that you want.
Ensure you read and familiarise yourself with the terms and conditions prior to application.
You can check the amount you will receive and the repayment details in the initial message you receive saying you are eligible.
Click the Shopify Funding Arrangement and go through all of the content so you fully understand what you are applying for. There will be a box at the bottom of the page to tick to agree with the terms and conditions.
Once you have accepted the amount offered the underwriters will assess your application. They will likely get back to you within 2-5 days to inform you of their decision. If you are approved you will receive your funds immediately.
You should remember that if you are changing your payment provider from another company to Shopify, it may take a while for Shopify to come to a conclusion and approve your request for your funding.
Sales & Advertising Transparency
The Shopify main site is easy to navigate and gains trust quickly with some reviews on the first page. It has 4 main FAQs that are succinctly answered with clear and transparent guidelines.
It has an easy to read front page which requests an email address and a clear message that visitors can benefit from a 14-day free trial.
The website also offers some engaging animation that shows exactly how to navigate and set up the online store. They explain the process in 3 easy steps.
Under the terms of service, there is a tab with key information about how to set up the store, marketing tips and useful advice on how to manage the business. Furthermore, it has a transparent page that explains the various pricing structure.
Perhaps on the negative side, the Shopify website has little information about the Shopify Capital options so relies on contact with customer service representatives that can put people off.
However, Shopify Capital has a separate direct website dedicated to the product, however, they do not provide a phone number so all communication must be done virtually.
Customer Service & Support
Shopify provides an uncomplicated process for firms to access the cash that they require to release and also grow their business. However, choosing between cash advance options or short term loans can be overwhelming and lead to confusion.
It’s wise to seek advice or spend some time researching loan types to discover what’s best for you.
Fortunately, if you feel you need to discuss your options, Shopify offers customers the option to contact a representative via email or chat who will be happy to go through details with you. You can contact customer services 24/7 via email, phone or live chat.
The testimonials that individuals offer Shopify Funding and also its customer care commonly vary. Many customers are fully satisfied with their experience but others have commented that they are frustrated with the contact.
On a positive note, Shopify has a large community that offers helpful support to each other when you fail to get the answers you need from the company itself. There are various articles you can search through that may have the answer to your questions.
Why Would Companies Use Shopify Capital
There are plenty of loans and finance options available to small businesses. But it can be difficult to get the exact type of funding needed.
Commonly, financial institutions and conventional lenders want to see evidence that you have the ability to make consistent earnings and profit prior to handing over any cash.
Applying for traditional funding can be a lengthy and drawn-out procedure that requires an individual or their business to be risk-free and have a reliable credit rating.
Financial institutions are often reluctant to provide businesses with a small business loan. That’s because there’s a great deal of investigation required before a loan is accepted. Ultimately, typical lending is seldom the best method to get extra money.
Regrettably, the majority of new businesses won’t have enough capital to start out on their own. Ecommerce platforms such as Shopify offers a good and helpful alternative to traditional lending.
Shopify is automatically simpler due to being an online platform. But it also has other significant benefits too.
The application procedure is commonly fast and basic because Shopify can make use of info about your business to make a decision on how much you could borrow. Coupled with that is the benefit of having no minimum payments it or deadlines to worry about.
Alternatives To Shopify Capital
Square operates in a similar way to Shopify except it is known for its excellent customer service. Basically, it helps companies receive money from customers and clients both on and offline. It’s ideal for running online and offline stores.
The finance offerings are similar to Shopify in that they will assess the company and offer finance based on company sales. They require a flat fee and will provide funds within a day of being approved.
You will receive notification of eligibility through your online account. The main difference with Square is that they assess your credit score in more detail than Shopify so getting approved is harder.
PayPal supplies small business financing for a set fee comparable to Shopify and Square. If you make use of PayPal services to take payments on your internet site, then you should have the ability to obtain an advance if needed. Paypal also uses sales as eligibility criteria.
Like with Shopify, you don’t need to worry about making consistent payments each week or month. Instead, PayPal deducts the part you owe monthly from your sales.
Every 90 days or two, you provide PayPal a minimum of 10% of your earnings. You must ensure that you’re sticking to these policies and paying at the very least, 10% of the overall loan worth every three months.
If you’re approved to get finance from PayPal, then you can get up to around 18% of your annual sales purchases as a loan.
The charges that you pay will be determined by the quantity of the loan, the portion of the daily sales, as well as the sales background. You can additionally make one-off payments which may be required depending on how much you are paying off.
Shopify Capital Phone Number
Shopify Capital doesn’t currently have a contact number but they are available 24/7 via email or chat.
If you get an offer from Shopify capital it’s a super convenient way to get your business a cash injection fast. It is also relatively stress free and you are able to pay back as your company starts earning money.
As the old saying goes “you have to speculate to accumulate” so a positive attitude and some extra cash can go a long way towards making your business successful.
If your company is already successful then there will be loans available from other sources. However, if you have bad credit and are committed to making a new business work then Shopify Capital offer the best solution.