Ottawa-based Shopify said Monday that it is offering its merchants interest-free, cash advances ranging from $200 to $500,000 per eligible company.
The e-commerce company said the advances will have to be repaid through future sales, but are meant to provide fast relief to cash-strapped businesses across the country, who realize how daunting it can be to take on debt.
“This funding will fill in the gaps that banks generally can’t satisfy right now and provide businesses with the cash flow they need, when they need it most now, not months from now,” said Kaz Nejatian, Shopify’s vice-president and general manager of financial solutions, in an email to The Canadian Press.
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Companies who receive funding from the program called Shopify Capital will only have to pay it back when and if their business starts to rebound through the Shopify platform.
“The merchant is not obligated to pay anything if they are not making sales,” Nejatian said.
He declined to reveal how much money would be available to Canadian merchants through Shopify Capital, but said the company is adding US$200 million to the program worldwide.
The company will decide which of its merchants are eligible for Shopify Capital in Canada by using an online application and approving those who qualify within a few days.
Meanwhile, its rival Amazon.com Inc. waived two weeks of inventory storage fees in March, as well as long-term storage fees for companies using its platform.
The Seattle-based tech giant paused loan repayments between Mar. 26 and Apr. 30 and relaxed delivery and fulfillment policies for sellers experiencing supply chain issues due to pandemic-related disruptions.
In an email to The Canadian Press, an Amazon spokesperson said, “We know this is a change for our selling partners and are working hard to help them during this difficult time.”
Over at Ebay Canada, businesses that are new to the platform can enrol in the Up and Running program to get selling fees on up to 500 sales waived and access a free basic store for a three-month period to help them better generate cash flow.
“The majority of Ebay Canada sellers are small businesses from across the country. They embody what it means to stay local and sell global,” said Rob Bigler, Ebay’s general manager, in a release.
“We are putting every resource into making it simple and cost-effective for them to quickly set up on Ebay and resume selling.”
The move comes after Ebay zeroed in on helping Halifax amid COVID-19 with its Retail Revival program.
The initiative launched in the city at the start of the year uses training, support and educational resources to help local business owners learn how to most effectively sell their inventory in a global marketplace.
The moves come as companies across Canada are struggling to stay afloat amid physical distancing measures that have shuttered brick-and-mortar stores and had to resort to layoffs and pay reductions to cover mounting bills.
According to surveys from the Canadian Federation of Independent Business, 56 per cent of small businesses have no more capacity to take on debt during this emergency, 30 per cent do not have cash flow to pay bills accrued in April and 39 per cent are worried about permanent closure.