Shopify Capital Originates $1.5B in SMB Loans and MCAs in Q3, Shares Delinquency Data

Shopify Capital is aggressively expanding its footprint in the small business lending space. In the third quarter alone, the platform originated $1.5 billion in merchant cash advances (MCAs) and loans. This brings their yearly total to $4.3 billion, already surpassing all of last year’s volume. For retailers using Shopify, this signifies that the platform is doubling down on its role as a primary source of working capital rather than just a software provider. The surge in volume comes alongside new data on repayment health. While Shopify is lending more money than ever, they are also closely monitoring delinquencies. Most of these advances are repaid automatically through a percentage of daily sales. This 'pay-as-you-grow' model is attractive for retailers because it aligns costs with revenue. However, the sheer scale of Shopify’s growth suggests they are becoming a dominant competitor to traditional banks and independent MCA providers. If you operate on Shopify, you likely have easier access to capital now, but you should weigh the convenience of these automated loans against the total cost of capital compared to external financing options. The platform’s ability to use your real-time sales data gives them a unique underwriting advantage, often resulting in faster approvals but potentially higher effective rates than traditional lines of credit.

Source: deBanked

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