ShipBob has launched a new financing solution for eCommerce businesses, offering merchants access to funding directly within its platform. This initiative provides small- to medium-sized businesses (SMBs) and mid-market eCommerce merchants with a flexible credit line, helping them manage inventory and growth. With the introduction of ShipBob Capital, the company aims to simplify financial access for online sellers, who often face challenges in securing funding through traditional means.
Previous financing solutions for eCommerce businesses have often involved lengthy application processes and rigid repayment terms, making them less accessible for smaller merchants. While various fintech companies have introduced alternative financing options, ShipBob Capital integrates directly into the ShipBob platform, allowing for real-time underwriting based on operational data. This approach contrasts with earlier models that relied primarily on credit scores and revenue history, potentially expanding eligibility for more businesses.
How Does ShipBob Capital Work?
ShipBob Capital, powered by JPMorgan-backed Slope, is accessible through the ShipBob dashboard, where merchants can apply for financing within minutes. Approved businesses can receive up to $250,000 instantly and potentially millions within two days. The program offers multiple repayment plans with competitive annual percentage rates (APRs), aiming to provide flexibility to merchants based on their financial needs.
ShipBob CEO and Co-founder Dhruv Saxena highlighted the program’s benefits, stating:
“With ShipBob Capital, our merchants can access the funding they need to invest in their business and scale, whether that means stocking up on more inventory or launching new products, without worrying about cash flow constraints.”
Why Is This Approach Different?
Unlike traditional financing options, ShipBob Capital leverages real-time data from its fulfillment platform to assess merchants’ financial conditions. By integrating with Slope, the program evaluates order volumes, inventory turnover, and shipping data, potentially resulting in higher approval rates. This data-driven underwriting method is designed to streamline the application process and provide merchants with quicker access to capital.
Slope Co-founder and Chief Product Officer Alice Deng emphasized the program’s efficiency, stating:
“Slope’s underwriting and product design make applying simple, approvals fast, and accessing capital frictionless. It’s built directly into the ShipBob dashboard, so getting capital is as easy as managing fulfillment.”
Slope, which raised $30 million in equity funding in 2023, has developed artificial intelligence-powered solutions for B2B payments, including customer risk assessment and cash management automation. ShipBob, on the other hand, secured $200 million in a Series E funding round in 2021, focusing on expanding its fulfillment network and app store integrations. Both companies’ developments have laid the groundwork for this financing initiative.
This financing solution could help online merchants secure funding without facing traditional banking barriers. By embedding financing into the same platform used for order fulfillment, ShipBob aims to reduce the complexity of capital access. For merchants, this means a potentially simpler way to fund inventory purchases, product launches, and other business expenses. The effectiveness of this model will depend on merchant adoption and the program’s ability to sustain competitive lending terms over time.
