Shopify is looking to spur entrepreneurship and boost its merchant count by removing a fundamental barrier to launching a business: startup capital.
The Ottawa-based e-commerce giant announced an expansion of its Shopify Capital program Tuesday that will see the company provide initial loans of $200 to qualifying applicants looking to test out entrepreneurship.
In its most recent earnings report last fall, Shopify highlighted how its existing Shopify Capital program issued $141 million in merchant cash advances and loans in the third quarter of 2019, an increase of 85 per cent year-over-year. Until now, the program’s financing terms have typically been tied to a business’s sales history on the platform.
OBJ360 (Sponsored)
‘Use it or lose it’: New Ottawa-Paris route needs more than just excitement to take flight
While the long-awaited return of transatlantic travel to Ottawa is good news for travellers, the success of the route is key to maintaining the service.
The Ottawa Senators have worked with businesses across the city for years, providing top-quality team building experiences for companies of all sizes.
These early-stage loans, on the other hand, can be approved without any sales or a credit check. In a release, the company positioned the idea as an alternative to dipping into savings, borrowing from friends and family or racking up credit card debt.
Kaz Nejatian, vice-president of Shopify’s financial solutions division, wrote on Twitter that the new program was aimed at entrepreneurs struggling to get started with a business idea, such as recently landed immigrants who haven’t built up a financial foundation yet or a founder targeting non-traditional industries.
The move to ease the on-boarding of new users comes amid a broader push to continue growing the number of merchants using Shopify’s platform.
Though the company passed a sizeable milestone with its one-millionth user in 2019, the company’s year-to-year growth in merchant base has showed signs of slowing in recent years. This has pushed Shopify to increase expansion efforts outside its core North American market; CFO Amy Shapero said during the company’s most recent quarterly earnings call that it was seeing its most rapid growth in international markets.
Shopify itself has been having a strong start to 2020 with its shares hitting new highs on the Toronto and New York stock exchanges. The firm’s shares on the TSX were trading at $576.25 on Tuesday, an increase of nearly nine per cent since the start of the year.
