Shopify launches funding arm in Australia

Shopify has launched its funding arm, Shopify Capital in Australia to help merchants grow and expand to new markets.

Applicants for these loans can receive offers up to $2.5 million through the same Shopify platform they already use to run their store.

Shopify Capital has employees that review the data-informed and machine learning models to ensure merchants receive the funding they need to help grow their business.

Once approved, funds are deposited in as little as two business days for merchants to use how they choose for their business, with most investing in talent, inventory and marketing to maximise growth or bridge cash flow during seasonal dips.

Funding through Shopify Capital is repaid through future sales, where remittance is success-based, rather than time-based.

As merchants make sales, they repay based on an agreed fixed percentage of daily sales, so payments flex with their business — lowering cash flow risks by removing the uncertainty of compounding interest rates and hidden fees. 

When merchants apply for the loan they will not be met with long application processes and the organisation does not do personal credit checks, take equity in the business or ask merchants for cash flow projections.

Shaun Broughton, managing director APAC, Shopify said, “Australian businesses are concerned about the increasing cost of capital, inflationary pressures impacting margins, and declining consumer confidence impacting sales. Shopify Capital is remitted only when a sale is made, so Australian merchants can be confident that they can afford to invest in their businesses.”

Since launching in 2016, Shopify Capital has provided more than US$3.8 billion in funding to tens of thousands of entrepreneurs in the US, UK and Canada — a 90 percent increase in total funding in the past 15 months.

This funding has been vital as businesses look to accelerate growth, with merchants that received funding through Shopify Capital averaging 36 percent higher sales in the following six months compared to their peers.

Shopify recently let go of 10 percent of its global workforce as e-commerce spending slows down.