ShopKeep Enters Small Business Lending Market

11.06.17

News

By Tribeca Venture Partners

Like its competitor Square, ShopKeep seems to be stepping closer into its business users’ back offices.

On Wednesday (Aug. 29), ShopKeep announced the launch of a small business financing solution, ShopKeep Capital. The merchant cash advance tool is available to the current 24,000 users of ShopKeep’s POS services.

“Difficulty accessing capital is an issue most businesses are familiar with, but for the independent merchants we serve, the issue carries even more weight,” said ShopKeep CEO and President Michael DeSimone in a statement. “Having access to funds when needed can be the determining factor as to whether or not a merchant can expand their business.

“ShopKeep’s mission has been to innovatively support the growth of the independent businesses we serve while making the lives of their owners and staff easier,” DeSimone continued. “ShopKeep Capital will serve as another critical pillar in serving that cause, and we look forward to seeing our customers grow and succeed with the help of a boost from ShopKeep.”

According to the company, its financing solution does not require fixed monthly payments. Instead, a percentage of daily sales will be used to repay the loans until it has been paid off.

“We are uniquely equipped to make very well-informed decisions as they relate to our customers and ShopKeep Capital,” DeSimone continued. “This service will make for a strong addition to our core businesses and contribute to our greater mission of supporting the success and growth of our customers.”

ShopKeep’s entrance in the small business finance space comes as another POS company, Square, finds major success with its own SMB lending operations. Square launched Square Capital last year, and in the company’s most recent earnings report, released earlier this month, the firm said its capital loan volume increased year over year by 68 percent.

“We’ve used machine learning and data science” to manage risk since the company’s founding, said Square CEO Jack Dorsey in a statement. “We’re not competing with financial institutions. We’re creating a new market where … the only other option was asking for a loan from friends or family,” he said. Automation, he said, helps sellers automatically onboard with Square to process payments. Risk assessment takes place for almost all transactions, he said.

Published on August 31, 2017.

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