Shopify Capital vs ClearbancTable of ContentsIntroductionUnderstanding Shopify CapitalExploring ClearbancShopify Capital vs Clearbanc: A Detailed ComparisonConclusionFAQIntroductionAs an eCommerce entrepreneur, one of the most critical challenges you will face is securing funding to grow your business. Whether you're scaling operations, increasing inventory, or boosting marketing efforts, having access to adequate capital can make a significant difference. Today, we delve into two prominent funding options for eCommerce businesses: Shopify Capital and Clearbanc. This post will present a comprehensive comparison to help you decide which financial partner aligns best with your business goals.Understanding Shopify CapitalWhat is Shopify Capital?Launched in 2016, Shopify Capital is a funding solution designed exclusively for Shopify merchants. It aims to provide merchants with much-needed cash injections without the hassle of traditional loans, such as credit checks or collateral.How Does Shopify Capital Work?Shopify Capital offers two primary funding types: loans and merchant cash advances. Shopify Capital Loan: Merchants receive a lump sum and repay it over 12 months through daily deductions from sales. Specific repayment milestones need to be met every 60 days.Merchant Cash Advance: Shopify offers an advance on future sales, and merchants repay through a percentage of daily sales. There are no repayment milestones, and it is available in the USA, Canada, and the UK.Eligibility and ApplicationTo be eligible, your store must meet specific criteria such as consistent revenue and a valid U.S. bank account. If pre-approved, Shopify will invite you to view your funding options directly through your Shopify admin dashboard.Usage of FundsFunds from Shopify Capital can be utilized for various business needs, including increasing inventory, enhancing marketing campaigns, or launching new projects.Exploring ClearbancWhat is Clearbanc?Clearbanc, recently rebranded as Clearco, is a Canadian-based financial technology company offering funding solutions tailored to online businesses. Clearbanc provides capital based on your sales and marketing data, offering flexible repayment through a percentage of daily revenue.How Does Clearbanc Work?Clearbanc offers non-dilutive capital that eCommerce businesses can use to finance their inventory, marketing, or other operational needs.Repayment: Clearbanc charges a fixed fee of 6-12% on the principal amount. The repayment is deducted daily from your sales until the total amount, including the fee, is repaid.Process: Businesses link their sales and marketing accounts to Clearbanc’s platform. Clearbanc assesses the data to determine the amount of capital they can provide.Eligibility and ApplicationTo qualify, businesses must connect their eCommerce and marketing platforms to Clearbanc’s dashboard. Clearbanc assesses this data to determine eligibility and fundable amounts.Usage of FundsClearbanc funds can be utilized for various purposes, including inventory procurement, marketing campaigns, and other growth-oriented projects.Shopify Capital vs Clearbanc: A Detailed ComparisonSpeed and Ease of AccessBoth Shopify Capital and Clearbanc offer quick access to funds. Shopify Capital provides funding within a few days of approval, while Clearbanc typically offers funding within 3-5 days. Both options significantly outpace traditional bank loans in terms of speed.Flexibility of UseBoth Shopify Capital and Clearbanc offer the flexibility to use funds across various business needs. However, Clearbanc’s funding can be strategically allocated towards specific growth initiatives by linking marketing tools. Shopify Capital generally provides more straightforward cash advances without such specific allocations.Eligibility RequirementsShopify Capital eligibility is tied closely to your Shopify store’s performance and criteria set by Shopify. Clearbanc’s eligibility extends to multiple eCommerce platforms like Amazon, BigCommerce, and Shopify, making it a more versatile option for multi-channel sellers.Repayment TermsShopify Capital: Repayment structures depend on the type of funding. Loans must adhere to specific repayment milestones, while cash advances have flexible repayments based on daily sales.Clearbanc: Repayments include a fixed fee and depend on a percentage of daily sales, offering flexibility if sales fluctuate.Customer SupportShopify Capital leverages Shopify’s robust support network via live chat, email, and phone support. Clearbanc’s customer support, although accessible via phone and email, does not have the breadth of support channels that Shopify offers.Risk and ScalabilityClearbanc is generally willing to take on more risk, offering up to $10M in funding compared to Shopify Capital’s $1M cap. This makes Clearbanc a suitable option for rapidly scaling businesses. Shopify Capital, however, provides a more structured and protective approach for smaller businesses.Security and Data IntegrationBoth companies prioritize data security and provide secure integration solutions. Clearbanc requires sales and marketing data to optimize funding terms, which might appeal to businesses looking for a dynamic funding structure. Shopify Capital’s integration is seamless, given it’s internal to the Shopify ecosystem.ConclusionChoosing between Shopify Capital and Clearbanc depends on your specific business needs, sales platforms, and growth objectives.Shopify Capital is ideal for Shopify-exclusive merchants looking for a streamlined, quick, and straightforward funding process with flexible repayment features.Clearbanc (Clearco) offers a more versatile funding option for businesses operating on multiple platforms, providing higher funding limits and dynamic repayment terms based on sales and marketing data.By thoroughly assessing your business model, growth aspirations, and platform dependencies, you can select the financial partner that best suits your needs. Remember, both Shopify Capital and Clearbanc are here to enable and accelerate your business growth, each with unique advantages tailored to various business scenarios.FAQWhich offers a faster turnaround time, Shopify Capital or Clearbanc?Both Shopify Capital and Clearbanc offer fast funding options with Clearbanc typically processing within 3-5 days and Shopify Capital within a few days of approval.Can non-Shopify merchants access Shopify Capital?No, Shopify Capital is exclusive to Shopify merchants. Non-Shopify merchants should consider Clearbanc for funding.Which provider offers higher funding limits?Clearbanc can offer up to $10M in funding, whereas Shopify Capital's maximum is $1M.How do repayment terms differ between Shopify Capital and Clearbanc?Shopify Capital uses daily repayments with options for loans or cash advances, while Clearbanc deducts a percentage of daily sales with a fixed fee on top of the principal amount.Can I use funds for marketing with both Shopify Capital and Clearbanc?Yes, both providers allow the use of funds for marketing initiatives. Clearbanc offers more flexibility in directly linking to marketing accounts for tailored funding. Grow Your Shopify Store with Shop Circle Capital Thank you for reading our latest insights on improving your Shopify store. As you consider different ways to grow, we want to introduce you to Shop Circle Capital, a great tool for flexible funding. Shop Circle Capital provides funding that adjusts to your business’s sales. This means you don’t have to worry about fixed monthly payments. Instead, you pay more when sales are good and less when they slow down, making managing your finances easier and less stressful. If you’re ready to take your business to the next level, Shop Circle Capital is here to help. Whether you need more inventory, want to spend more on marketing, or plan to enter new markets, our funding can help you get there. Don’t delay your growth. Click here to apply for Shop Circle Capital today. Begin your application now and get funding that fits your business’s needs and pace. Discover how our flexible financial approach can help your business grow smoothly and quickly. Act now and choose Shop Circle Capital. Let your business growth drive your funding and see how far you can go with a partner that adjusts to your needs.