what is shopify capital

what's up everybody it's jamie here from,shopify masterclass and today we're,going to cover,shopify capital and what is it in,summary shopify capital,allows shopify users to get hassle free,and relatively free,and low cost business financing for,their shopify stores this can be,important especially when you're,starting out,or if you want to scale and you want to,get that type of funding so you can,spend more on your marketing,inventory whatever costs you deem,necessary shopify offers two,types of short-term business financing,there's cash advances,and short-term loans one important thing,to note is that shopify capital is,limited to the geography you're in,you really have to be in the uk the,united states or canada,and within though there's different type,of restrictions as well,so it's important to check this through,before you consider applying,one thing to note is that none of this,is legal advice here you have to contact,your shopify loan agreement,and a lawyer if you want any legal,advice there before we get into it i,just want to quickly thank our sponsor,discover profit calc the affordable and,easy to set up shopify app,that crunches your numbers in just one,click it automatically syncs with all,your accounts and expenses to calculate,your profit,displaying everything in an easy to read,dashboard so you understand your,business in real time,start for free on the shopify app store,today there are two,types of business financing for shopify,capital the first one i'm going to go,into,is merchant cash advances and so you,should check again if this is available,in your region so what merchant cash,advantages are,is shopify is essentially going to fund,a percentage of future sales,so this is going to be they're going to,give you money for ace loan or of some,type,and it's going to be a cash advance and,the way you're going to pay this back is,going to be a percentage of your sales,so over time it's going to collect it on,a daily basis,let's say it's 10 of your sales sell 100,worth that day,10 is going to go to fulfilling that,loan from the cash advance this is going,to be done until your cash advance,is fully paid off one thing to note,about this type of cash advance,is that it doesn't have a payback date,it's essentially going to happen over,time until that amount is paid off there,is no date such as due in three months,or due in six months shopify capital,offers,a wide range of amounts for this type of,advanced it can range from 200,usd all the way to a million dollars usd,based on your shopify store,and the risk they associate with it the,second type of loan from shopify,short-term loans and this is where,shopify gives the merchant,or the merchant company a lump sum and,then you pay that back with a set due,date,and interest payments over time these,payments might be collected on daily or,weekly basis depending on the terms of,the loan for,example shopify might loan you five,thousand dollars with a boring cost of,650,and a repayment rate of 10 the 5 000,amount received would be delivered to,your business bank account and shopify,capital,would receive 10 of your daily sales,revenue until the 5,650 total owed is repaid at the end of,the 12 month,term each of the loans 60 day milestones,would have a minimum,payback amount of 941.16 the total,amount of owed,if you reach the first 60-day milestone,and we paid only 800,through your daily repayments then the,remaining 141 dollars would be debited,to your account,this functions very similar with the,take rate of daily sales,but there is a fixed date for the,repayment that you will have to make up,if your daily sales do not meet that,amount,in terms of the range it's very wide and,it is the same as the cash advance,although it would depend on your region,generally it's between 200,and 1 million dollars usd for short-term,shopify loans overall these can be,really advantageous for your store as,you can give the capital that you need,to grow your store in the way you think,is best capital can often be a limiting,factor in e-commerce this is for ad,spend,or inventory as a payback period can,really depend and having that extra cash,will allow you to finance growth earlier,overall the pros of shopify capital or,is that there's no credit score,requirements,rates tend to be inexpensive over time,comparisons with other loans you could,get,there are no extra fees applicants can,be quickly qualified,and the application process is quite,easy as shopify has all your store data,and can help judge it very quickly based,on your revenue numbers so far,the cons of this are that the repayments,are required quite frequently this could,be on a daily weekly or monthly basis,depending on your loan,and no long-term financing options are,available,to apply for these loans you want to go,to the shopify capital portion of the,website and you can fill out the,application there,it will require you to log in with,shopify and so on this concludes the,video on shopify capital,if you enjoyed this video i love if you,leave a like below have any questions,leave a comment and if you haven't yet,please subscribe as it really helps the,channel out,thank you for watching

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