But such numbers hide a fact. Large businesses make up the lion\u2019s share. Amazon handled 57% of all US online sales last year.<\/a><\/p>\n\n\n\n Elsewhere, it is the same\u2014giant enterprises, Alibaba, eBay, Flipkart, and Rakuten tower over others.<\/p>\n\n\n\n According to Forbes, 90% of online businesses fail to make any headway!<\/p>\n\n\n\n You need deep pockets to survive in this domain.<\/p>\n\n\n\n Shopify Capital<\/a> is one of the alternatives to explore if you are short of funds.<\/p>\n\n\n\n As of May 2021, there are reportedly 1.7 million Shopify stores globally.<\/p>\n\n\n\n It does not take long in the online business to understand that capital is its lifeblood.<\/p>\n\n\n\n Everything depends on how many financial reserves you have.<\/p>\n\n\n\n But most online entrepreneurs do not have deep pockets.<\/p>\n\n\n\n All they have is a dream and the wish to work hard and succeed.<\/p>\n\n\n\n Shopify realized this early on and in 2016 introduced Shopify Capital. It offers small short-term loans to Shopify owners.<\/p>\n\n\n\n Shopify Capital is not open to everyone.<\/p>\n\n\n\n You cannot open a store and ask for a handout a week later.<\/p>\n\n\n\n Shopify extends the facility to shop owners based on:<\/p>\n\n\n Every lender likes to know that they can trust their debtor. Those who have worked with Shopify for at least a year become eligible.<\/p>\n\n\n\n You must be a frequent seller, who visits the site regularly.<\/p>\n\n\n\n Shopify earns not only from hosting but also from a percentage of transactions. It varies between 2.5 to 3% depending on the plan opted for.<\/p>\n\n\n\n A low-volume seller cannot access Shopify Capital. At least, $10,000 in revenue is needed (though exact figures are never disclosed).<\/p>\n\n\n\n It is important to note that you cannot apply for Shopify Capital. They will reach out to you by email and dashboard notification.<\/p>\n\n\n\n As the owner of a Shopify business, you have to understand the distinction between Shopify Capital and a venture capital firm.<\/p>\n\n\n\n A venture capitalist offers a certain amount for the growth of the business. They keep a close watch on the business process and perform due diligence.<\/p>\n\n\n\n Very often, a VC would provide management inputs. VCs have one or more seats on the board and own shares.<\/p>\n\n\n\n It is not necessary that to receive an amount from Shopify Capital you have to be registered as a company. Shopify wants no say in your management decisions or how you handle marketing and logistics.<\/p>\n\n\n They offer quite small amounts (say 2-5% of your annual turnover ).<\/p>\n\n\n\n It might be as low as $250 and as high as $500,000.<\/p>\n\n\n\n They do no credit check and subtract the amount from your balance. The rates of interest are quite low, which makes it very appealing.<\/p>\n\n\n\n When you apply for a loan, there is a 5-day waiting period for approval. After the loan is sanctioned, the amount is provided within 2 days.<\/p>\n\n\n\n The payback begins the next day. For every sale, they take 10-20% till the amount is paid back.<\/p>\n\n\n\n The advantages of Shopify Capital are many. Let\u2019s discuss each in turn.<\/p>\n\n\n\n 1. Minimum fuss If you would approach a bank for a loan, there would be an immense amount of legwork necessary.<\/p>\n\n\n\n You have to provide details about your business. Some of these can run into pages of information.<\/p>\n\n\n\n Perhaps you do not maintain an Income & Expenditure Account and Balance Sheet, and drawing these up for the last few years would be painstaking.<\/p>\n\n\n\n Moreover, a bank can require you to buy fire insurance to protect your stock.<\/p>\n\n\n\n Most importantly, banks are not interested in providing loans to online stores because they consider it a risky venture.<\/p>\n\n\n\n Shopify Capital on the other hand knows about your business and its metrics\u2014what you sell, turnover, trends, number of customers, interest in your product\u2014nothing is unknown to them.<\/p>\n\n\n\n It is easier for them to provide loans.<\/p>\n\n\n\n Every business needs professionals. Sooner or later, the burden would be too much for you to bear alone.<\/p>\n\n\n\n At the start, you managed product shipment and advertisement, but as the business grows past the $200,000 revenue mark, you need a team.<\/p>\n\n\n\n The best approach is to hire a consultant and freelancer for SEO<\/a> and advertising. Those are specialized tasks you are not an expert at.<\/p>\n\n\n\n Though a freelancer would cost you less than someone on permanent payroll, you need to settle their accounts once every fortnight.<\/p>\n\n\n\n Loaning a bit from Shopify Capital and paying it back over a week is the perfect model.<\/p>\n\n\n\n To grow your business<\/a> you need more customers. To attract more customers you need a lot of products.<\/p>\n\n\n\n Maybe at the start, your product line was quite restricted because you had no capital.<\/p>\n\n\n\n Vendors would not provide you with goods unless you came up with a 50% advance. Unfortunately, you had exhausted your nest egg in developing the online store and had little to spare.<\/p>\n\n\n\n But as an experienced business owner now you have access to ready cash thanks to Shopify Capital.<\/p>\n\n\n\n You can not only add new products but also find vendors in person instead of trusting the web.<\/p>\n\n\n\n The best dropshippers have visited China and spent a week in Guangzhou identifying manufacturers and shippers.<\/p>\n\n\n\n The same is true if you are going to source from any other place. Visiting a factory and understanding it firsthand is a key part of growing your business. Without a first-class knowledge of how it’s made, you can never sell a product.<\/p>\n\n\n\n When it comes to online shopping aesthetics matter a lot.<\/p>\n\n\n\n Your site needs to look trendy to attract customers. The price filters have to work perfectly, the blog has to be well written, and so on.<\/p>\n\n\n\n But how do you hire a Shopify developer<\/a> unless you have a few thousand to spare?<\/p>\n\n\n\n A top-notch SEO firm and good content writers don\u2019t come cheap either.<\/p>\n\n\n\n For all of this, you need an injection of capital and the $10,000 you can access at Shopify Capital is just what you need.<\/p>\n\n\n\n You have the site and the product but little sales are happening.<\/p>\n\n\n\n This is because you are not visible through organic search. SEO worked well and propelled you from page 30 to page 2 but that simply was not enough.<\/p>\n\n\n\n You need to spend on marketing.<\/p>\n\n\n\n A few thousand spent on YouTube ads and Instagram would do the trick. And Shopify Capital is the perfect way to access that amount.<\/p>\n\n\n\n Shopify Capital is an excellent idea.<\/p>\n\n\n\n Small businesses need access to easy capital to survive. Shopify Capital is a fantastic way to avail of loans when needed.<\/p>\n\n\n\n The interest is quite low and the payment terms are not very strict.<\/p>\n\n\n\n If you are eligible, borrow from Shopify Capital and watch your revenue rise.<\/p>\n\n\n\n Additionals:<\/strong><\/p>\n\n\n\n The world of e-commerce seems to forever trend upwards. In 2021, online retail sales across the world were $4.9 trillion. It would rise by 50% in the near term, according to Statista. But such numbers hide a fact. Large businesses make up the lion\u2019s share. Amazon handled 57% of all US online sales last year. […]<\/p>\n","protected":false},"author":1,"featured_media":13023,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[107],"tags":[],"class_list":["post-13020","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecommerce"],"yoast_head":"\nWhat is Shopify Capital?<\/strong><\/h2>\n\n\n
![\"Shopify](\"https:\/\/www.smartbusinessdaily.com\/wp-content\/uploads\/2022\/08\/Shopify-Capital-definition1.jpg\")
<\/figure><\/div>\n\n\nIs Shopify Capital open to everyone?<\/strong><\/h2>\n\n\n\n
![\"Shopify\"](\"https:\/\/www.smartbusinessdaily.com\/wp-content\/uploads\/2022\/08\/Shopify.webp\")
<\/figure><\/div>\n\n\n1. Duration<\/strong><\/h3>\n\n\n\n
2. Volume<\/strong><\/h3>\n\n\n\n
How Does Shopify Capital Work?<\/strong><\/h2>\n\n\n\n
![\"Shopify](\"https:\/\/www.smartbusinessdaily.com\/wp-content\/uploads\/2022\/08\/Shopify-Capital-usage.jpg\")
<\/figure><\/div>\n\n\nWhy use Shopify Capital?<\/strong><\/h2>\n\n\n\n
Overview:<\/pre>\n\n\n\n
2. Upgrade your team
3. Add new products
4. Update your site
5. Grow through ads<\/p>\n<\/div><\/div>\n\n\n\n1. Minimum fuss<\/strong><\/h3>\n\n\n\n
2. Upgrade your team<\/strong><\/h3>\n\n\n\n
3. Add new products<\/strong><\/h3>\n\n\n\n
4. Update your site<\/strong><\/h3>\n\n\n\n
5. Grow through ads<\/strong><\/h3>\n\n\n\n
Lastly\u2026<\/strong><\/h2>\n\n\n\n