Shopify's partnerships with banks allow for the provision of credit and capital products, a step appreciated by many. However, this process can quickly become less efficient and lead to an increase in defaults. As an owner of a space within the Painted Tree, I am provided with an annual rental space and a convenient checkout system for tenants. Monthly payouts are made through a standard check process. Our primary account is held with a local bank, which is where all sales within the Painted Tree are processed. Due to my participation in both the Capital Program and Credit Card Program, I am now required to hold sales as draft orders until the end of the month. This is because both programs offer only one option for paybacks, either through Shopify or through automatic drafts from my local bank. Transferring or adding funds to my Shopify Balance account can take up to four days through ACH, and transferring funds from the balance also takes a significant amount of time.
What happens is the capital payment is debited sooner than funds from sales credited. And if I run a sale that came through the Painted Tree, that capital payment comes out well before funds can be transferred from our local bank, which is why I stack draft orders for month-end. .
The credit card program is beneficial for merchants, but also has its drawbacks. While requiring full payment of outstanding balances each month is acceptable, using it for inventory creates a delay in receiving funds. This delay can lead to the card being locked and a portion of the sale going towards credit payments.
Shopify Capital group should recognize these shortcomings. Customers should have the choice to select between a Shopify balance account and their local bank account, but as far as I know, this option doesn't currently exist. It's either one or the other.
As a tenured employee of 40 years of experience as a commercial lender, I view Fish On Custom Rods as a secondary business. I am grateful for Shopify's offerings and hope for further improvements in merchant-friendliness.
Much appreciated,
Joey
Fish On Custom Rods, LLC
Joey E. Moll
