Shopify Capital Extends Loans To Canadian SMBs Struggling Amid Outbreak

Shopify is introducing a financing division that will extend loans to small and-medium-sized businesses (SMBs) in Canada financially suffering due to the global coronavirus pandemic, the company said in a statement on Monday (April 20).

Headquartered in Ottawa, Ontario, the eCommerce company and platform rolled out Shopify Capital to grant SMBs cash advances ranging from C$200 to C$500,000.

“Shopify Capital isn’t traditional financing. Instead, we offer cash advances that are repaid through future sales,” the company said. 

The funding is intended to “fill in the gaps” for financial institutions struggling to keep up with the demand for business assistance. Shopify’s goal is to get money to businesses when “they need it most — now, not months from now,” the company said.

Shopify taps “hundreds of data points based on a merchant’s history with the platform” to see if a company is qualified for assistance, spokesperson Sheryl So told The Logic. With more than 65,000 Canadian clients, Shopify anticipates “tens of thousands of them will be eligible.” 

Kaz Nejatian, vice-president of the financial solutions product group, tweeted that it took just 34 minutes to approve its first merchant for a business loan. 

Shopify Capital was introduced in the U.S. in April 2016 and extends loans in 14 states. In Canada, it is concentrating on offering cash advances insured by Export Development Canada, So said. She added that Shopify’s clients in Canada “export a good portion of their products.”

The launch in Canada reflects the company’s response to the coronavirus crisis, which led to allocating $200 million to grow Shopify Capital. 

Also in response to the coronavirus pandemic, the company is offering Shopify Email at no charge through Oct. 1. Users of the Shopify platform will soon see the new email option in the admin menu in Shopify Marketing. The ability to schedule emails is in the works.

The Royal Bank of Canada (RBC) recently rolled out digital government identity verification capabilities, allowing customers to verify their identities using its RBC mobile app.