What is Shopify Capital?

Shopify Capital is a financing program offered by Shopify that provides businesses with access to funding in the form of either a merchant cash advance or a Shopify Capital loan. With a merchant cash advance, Shopify provides a lump sum of money in exchange for a percentage of future sales until the advance and its fee are repaid. A Shopify Capital loan works differently, where the business repays a fixed amount with a set repayment schedule, often based on daily sales.

Purpose of Shopify Capital

The primary goal of Shopify Capital is to help small and medium-sized businesses grow by providing quick, accessible funding without the need for traditional loan applications. This funding can be used for inventory, marketing, or business expansion. Unlike traditional loans, Shopify Capital uses sales data from the Shopify platform to offer amounts that align with the business's revenue, thus reducing the risk for both Shopify and the merchant.

Shopify Capital Eligibility

To qualify for Shopify Capital, businesses must meet certain criteria:

• Sales performance: Shopify analyzes a business's sales history and growth trends.
• Account health: The overall stability and standing of the merchant's Shopify account, including adherence to Shopify’s terms of service.
• Shopify Payments: Businesses that use Shopify Payments are more likely to qualify, as it allows Shopify to track sales and repayments efficiently.
• Duration of business activity: Merchants with consistent sales over time are more likely to receive offers.
  
  

Shopify evaluates these factors periodically, and if a business qualifies, it will receive an offer directly in its Shopify dashboard. There is no formal application process for merchants to initiate—Shopify approaches them based on the internal analysis of their sales and business performance.

Restrictions & Cons of Using Shopify Capital

While Shopify Capital provides fast and accessible funding, there are some limitations:

• High fees: The cost of borrowing through Shopify Capital can be higher than that of traditional loans.
• Limited flexibility: Shopify Capital loans and merchant cash advances are based strictly on sales through the Shopify platform, which may not be ideal for businesses with fluctuating or seasonal income.
• No control over repayment timing: Shopify automatically takes a percentage of daily sales for repayment, which could strain cash flow, especially during slow sales periods.
• Limited eligibility: Only businesses with consistent performance on Shopify are eligible, leaving out new or struggling merchants.

Yardline: The Smart Alternative to Shopify Capital

While Shopify Capital provides integrated funding solutions, its terms may not suit every business. Some merchants may find the repayment structure or eligibility criteria restrictive. Yardline, on the other hand, offers a more flexible and comprehensive funding alternative for online businesses.

Yardline provides a range of tailored financial solutions to help businesses grow. Whether merchants need capital for inventory expansion, marketing, or launching new products, Yardline's suite of funding options addresses the unique needs of online entrepreneurs.

Yardline’s application process is simple, with approval decisions typically made within 24 hours. The company offers funding amounts from $5,000 to $20 million, making it suitable for businesses of any size.

Funding solutions from Yardline include:

• Small Business Loans
• Revolving Lines of Credit
• Revenue-Based Financing
• Personal and Business Credit Cards
• Purchase Order (PO) and Invoice Factoring
• Inventory Financing
• SBA Loans

Eligibility for Yardline funding is straightforward, with only three main requirements:

1. The business has been operating for at least six months.
2. It generates a minimum of $5,000 in monthly revenue.
3. It is a registered business.

Yardline also provides funding to businesses in North America, Europe, Asia, and Australia. Many Shopify sellers have benefited from Yardline’s flexible funding options, using them to grow their operations by ordering more inventory, launching new products, and increasing advertising.

Get started today by applying for funding with Yardline to help your business grow and reach new heights.