ShopKeep Launches Cash Advance Program to Compete With Square

EXCLUSIVE — Square Capital isn’t the only place outside of a bank for a small business to get the money necessary to grow, and ShopKeep wants its business customers to know.

The enterprise software provider, which transforms an iPad into a “connected cash register” for merchants, has launched its “ShopKeep Capital” service today for businesses.

The service allows SMBs (which are already ShopKeep customers) to apply for a cash advance, to be used for adding employees, investments, or other growth opportunities.

“The [advance] is based on what the customer sells, it’s based on the daily volume of payments,” Michael DeSimone, chief executive and president for ShopKeep, told Bank Innovation. “They typically get the funding within two days. Repayment is deducted from their daily credit card settlements.”

Right now, merchants that take a ShopKeep Capital cash advance will pay about 10% of their daily credit card settlement figure back towards ShopKeep; as the program expands, the company plans to make it so merchants can choose different terms for the advance including the percentage for repayments, according to DeSimone.

There are about 25,000 SMBs using ShopKeep currently, according to DeSimone. The goal is to provide a flexible, balanced solution for business growth, DeSimone added.

With the new service, ShopKeep is shouldering into the space of companies like Square and PayPal, which both have programs that offer loans to businesses.

Square’s lending arm, Square Capital, offers loans to sellers on its network based on potential growth and keeps its average loan size small — at about $6,000 — making its major competition players PayPal and now ShopKeep, as opposed to banks.

The major draw of these types of cash advance programs for SMBs — as opposed to heading to a bank or marketplace lender — is the fact that Square, ShopKeep, and PayPal already have all of that business’ data at hand.

“It’s all set up, all contained in ShopKeep, [businesses] can take the advance at any time,” said DeSimone. “It’s all under one umbrella, it comes right out of ShopKeep giving them their POS platform.”

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