Shopify Capital is a financing service offered by Shopify that helps entrepreneurs obtain funds to grow their business. Here's how you can use Shopify Capital:
- Eligibility: To become eligible for the Shopify Capital program, you must first be an active Shopify merchant with a solid sales history. Shopify uses internal performance data to determine eligibility.
- Financing offers: Once you are eligible, Shopify will offer you financing options tailored to your needs. These offers may include cash advances or repayable loans.
- Offer Acceptance: Choose a financing offer that suits you and accept it from your Shopify dashboard. Specific terms, such as the amount financed and the repayment percentage, will be clearly presented to you.
- Use of funds: You can use the funds received for various needs such as:
- Purchase of inventory
- Marketing and advertising
- Equipment purchases
- Expansion of your operations
- Repayment: Repayments are made automatically by deducting a fixed percentage of your daily sales. This percentage was defined at the time of accepting the financing offer.
For example, imagine you own a Shopify agency selling fashion accessories. After a year of relative success, you notice growing demand for a new product line. However, you lack the funds to launch this new range. Shopify Capital offers you €10,000 in financing, which you accept. You use this money to purchase inventory and launch an online marketing campaign. Sales begin to increase, and you repay the financing at a fixed percentage of your daily revenue. The automatic repayment cycle eases the stress of managing monthly payments, allowing you to fully focus on growing your business.
Sources: Shopify Capital, Shopify Capital Guide