How we're $mashing one of the biggest barriers to entrepreneurship

Traditional banking is killing entrepreneurship. 

Lengthy, complicated applications and sky-high rejection rates from lenders are a massive barrier: 29% of U.S. small businesses collapse due to funding shortages, and only 28% are able to secure bank loans. This disparity hits minority and female-owned businesses the hardest.

When you force an entrepreneur to spend all their time navigating processes and applications, it means they aren't spending time building. If we want more entrepreneurs to be successful, we need to fix this archaic system. 

Enter Shopify Capital.

$5.1 billion injected into entrepreneurship

Shopify Capital uses data from your Shopify store to determine your eligibility for funding, from a few hundred dollars up to $5 million. There’s no lengthy application process, no personal credit checks, no equity taken in the business.

Capital is part of Shopify Lending, which also includes the recently launched Shopify Line of Credit, a revolving credit line.

Since 2016, more than $5.1 billion has been distributed to merchants through Capital alone. (To put that number in context: if you saved $100 every day, it would take you 139,726 years to reach $5.1 billion. 🤯)

Flexible funding is especially valuable as entrepreneurs plan for peak sales moments, whether that’s a special promotion, a season, or holiday shopping.

After using funding through Capital to help with inventory management in 2021, women’s footwear company Pashion saw a 375% increase in holiday sales over the prior year. “I don’t think we would have seen anything close to that growth figure without it,” CEO and founder Haley Pavone said.

But even those big numbers don’t fully capture the impact. For a firsthand look at how merchants are using Capital to turn their ideas into thriving businesses, we visited three of them.

Hell Babes

When Jessica Wise was 19, she saw a woman riding a motorcycle for the first time and she's been riding ever since. Her passion for riding motorcycles and "raising hell" inspired her to found lifestyle brand Hell Babes in 2014.

But funding that idea was way harder than dreaming it up. Jessica initially put everything on credit cards, but the steep interest rates soon had her looking for a different solution. Then she received an offer through Shopify Capital directly in her Shopify admin.

With funding through Capital, she took out one loan – $17,000 to purchase inventory – and eventually took out eight more. She has used them to fund ventures like designing her own line of motorcycle jackets.

“If it weren’t for Capital, then I would be out talking to banks, applying for credit lines, waiting to see if I get approval,” Jessica said.

Porter Road

Co-founders Chris Carter and James Peisker met working as chefs in a restaurant. They worked together for three days before quitting their jobs and deciding to start a business together.

The result? Porter Road, an end-to-end meat company that works directly with small farms to process, cut, dry age, sell, and fulfill high-quality meat.

“When we opened the doors to Porter Road, we had $500 in our bank account,” Chris said. “We had half a beef and two hogs hanging on a rail system that we made in our walk-in cooler out of piping from Home Depot.”

Said another way: They needed funding. Badly.

Why Capital? “Everybody else said no,” Chris said. Porter Road uses funding through Capital for Black Friday-Cyber Monday marketing campaigns, operational expenses, cost of goods, product photography, and influencer campaigns.

Over three rounds, Porter Road has taken $1.3 million in funding. The $1 million they spent on marketing drove $11 million in sales.

The Public Pet founder Jordan Lee

The Public Pet

Growing up in Hawaii, Jordan Lee experienced a culture where everyone was his auntie or uncle. He took that “chosen family” concept and launched a pet supply store called The Public Pet, where every animal is loved and cared for by all.

Jordan needed funding to beef up his inventory, improve the aesthetic of his store, and grow his team. He considered all kinds of financing options, but chose Capital because it was easy to apply for, easy to pay back, and integrated right into his Shopify admin.

The Public Pet has taken seven rounds of funding through Capital for $430,000 total. As a result, Jordan’s revenue has grown by more than 40% and he’s increased inventory by more than 300%.

Flexible funding has allowed Jordan to take bigger risks with his business: trying different product lines, traveling to meet vendors face-to-face, and even developing his own pet treat product line.

“Shopify Capital has definitely helped me to open doors, windows, trap doors, side doors…” Jordan said. “It’s definitely helped me to experiment and to realize that there are more possibilities out there.”

Financial products that lower barriers for entrepreneurs

Lending is just one of our financial solutions. Other products merchants can use to overcome the financial barriers to entrepreneurship include:

• Shopify Balance, which helps merchants manage their money
• Shopify Bill Pay, which helps merchants manage and pay vendors
• Shopify Credit, a business charge card

We are committed to providing our merchants the rocket fuel they need to grow. When more funding is available to entrepreneurs, more businesses can exist in the world—and that’s what we’re all about. Here’s to billions more injected into entrepreneurship. 🚀

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All financing through Shopify Lending including Shopify Capital and Line of Credit products is issued by WebBank in the United States.

Shopify partners with Stripe, Inc. and affiliated companies, and financial institution partners, including Evolve Bank & Trust, Member FDIC, and Celtic Bank, to offer money transmission, banking, and issuing services, respectively.