Shopify Capital Launches in Canada

The program provides small business loans up to $500,000 for Shopify merchants.

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Need to Know

  • Shopify has expanded its Shopify Capital program into Canada.
  • The program provides small business loans (up to $500,000) for Shopify merchants that are repaid through future sales.
  • Merchants can use the loans to invest in new products, marketing, expansion, or whatever else will benefit their brand.
  • The quick expansion of this program is one of many initiatives Shopify has rolled out to support small businesses amid the COVID-19 pandemic. Shopify Capital also launched in the UK three weeks ago.

Analysis

In the midst of the economic crisis caused by the COVID-19 pandemic, Shopify has expanded its Shopify Capital program into Canada.

Shopify Capital is a program that offers cash advances that are repaid through future sales. Eligible Canadian merchants can now apply for up to $500,000 in loans through an online application. 

Launched originally in the United States in 2016, Shopify Capital has cumulatively funded almost $770 million in small business loans, including $141 million in last year’s Q3 alone, proving that this arm of the company is a meaningful part of business for the tech giant. 

“[P]art of this is making sure that we have merchants in the entirety of their journey to success, certainly things like having additional cash for things like inventory and marketing are very important to them. And there’s not too many places to get that with capital. So we think we’re helping merchants by doing this,” explained COO Harley Finkelstein on an earnings call last year. “It also serves of course as a way to retain merchants because we’re not only now their e-commerce platform or the point sale provider or the payments provider, we’re also now in some cases playing the role of their capital provider.” 

Shopify is moving quickly with this new expansion. Kaz Nejatian, VP of financial solutions for the e-commerce platform, tweeted out that it only took 34 minutes for the first Canadian Shopify Capital loan to be applied for and accepted.

Now with COVID-19 hitting businesses hard, Shopify has upped the ante. The e-commerce company has launched several initiatives to support small businesses including a free 90-day trial for all new merchants, local in-store/curbside pickup and delivery for POS merchants, and a $200 million commitment for Shopify Capital. 

The company has also committed to fast-tracking expansion to core destinations, such as this expansion into Canada and its March 30, 2020 launch in the UK. In addition to these initiatives, Shopify has also launched the Shopify App Challenge, calling for skilled developers to come up with an app that supports small businesses adjusting to the pandemic and has fast-tracked their new email marketing feature to help merchants connect with their customers.

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