While e-commerce has become a merchant’s lifeline channel during COVID-19, that doesn’t mean that sales are booming. Many small businesses are hurting due to an overall drop in consumer spending. So Shopify is giving a hand to its Canadian merchant clients by offering cash advances. Shopify sees purchase transaction activity for these businesses, so they do have history with them to determine the advance amounts. Good to see the big players like Shopify doing what they can in this time of need.
The following Financial Post article reports more on this topic which is excerpted below:
Shopify Inc. will begin providing cash advances directly to online merchants in Canada, as the Ottawa-based ecommerce giant rushes out products to support small businesses through the COVID-19 pandemic.
In an interview with the Financial Post, chief operating officer Harley Finkelstein said that merchants on their platform will qualify for funds ranging from $200 all the way up to $500,000, depending on the nature of their business.
Originally launched in 2016, Shopify Capital was originally only available to ecommerce merchants in the United States, but in late March the company expanded eligibility to the United Kingdom.
Shopify took great pains to emphasize that the Shopify Capital program provides “cash advances” — not loans — to the merchants who use their platform.
“It’s not a loan. It’s a cash advance, because if you don’t sell anything tomorrow, we’re not taking anything out,” Finkelstein said.
Overview provided by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group.