eCommerce merchants who don’t like waiting two weeks for a paycheck flock to the platform. And, most Payability reviews are “excellent.” But, these critiques may not paint a complete picture of what you can expect. So, learn everything you need to know before you apply for one of the funding options you’re curious about.
Here’s what’s in store:
- What is Payability?
- Who Can Qualify for a Payability Account?
- How Do Payability Alternatives Stack Up?
- Conclusion
What is Payability?
Payability is a financial tech company that extends capital options to eCommerce merchants. The company, founded by Keith Smith and Scott Lynn in 2014, is most popular among growth-stage Amazon sellers.
How Does Payability Work?
The platform offers three central financial services for online sellers.
- Inventory Funding
- Daily Working Capital
- Seller Card
So, here’s what each of these services encompasses.
1. Inventory Funding
Payability’s Instant Advance is a funding option that enables sellers to purchase inventory, launch new products and campaigns, and get bulk deals from suppliers. The typical amount of your advance is 75% to 150% of one month of marketplace revenue.
For example, if you average $20K in monthly sales revenue, your approved advance amount might range from $15K to $30K. This type of funding comes in handy when you need an extra boost to grow your business or to fulfill an unusually large order.
To qualify for an Instant Advance, you must have a minimum of nine months selling history and a $10K monthly sales average. There are no credit checks and you can get approval within one day.
These advances have no origination costs and fees start at 0.5% per week. The sooner you pay back the funding, the less it will cost. Repayment is typically taken in the form of 25% of your future receivables. In other words, 25% of each future sale will automatically go toward your payment to Payability.
2. Daily Working Capital
Payability’s Instant Access is a popular option for sellers who don’t want to wait weeks for payouts and instead want instant access to funds. Without constant cash flow, it can be difficult to keep your operations running smoothly and nearly impossible to grow.
Imagine that you receive an influx of orders on a specific product and sell out in one day. This seems like a good thing… until you get orders of the same product the next day. Many marketplaces don’t offer payouts right away, making it nearly impossible to replenish stock during a surge. However, if you have instant access to funds, you can reorder stock at any time.
To qualify for Instant Access, you need a minimum of three months selling history and a $2K monthly sales average. There are no credit checks and you can get same day funding. Each day, 80% of your gross sales will go into your Payability account for repayment, and the remaining balance will be available when the marketplace releases funds.
There is a fixed flat fee for the service, which is typically between 1-2% of gross sales and instant bank transfers are free. Some merchants have complained that their fees were higher than advertised, so be sure to read the fine print and pay attention to your accounting.
3. Seller Card
Payability’s Seller Card is a cash card that gives users immediate access to their Payability funds with a 2% cashback bonus. The card works like a debit card and can be used anywhere Visa is accepted.
The convenience and cashback are the highlights of the card. If you use the card, you will no longer need to mess with bank transfers. And, in addition to the 2% cashback, you can earn even more if you sign up as a new user with select seller tools:
- Teikametrics, 20% cashback
- Avalara, 15% cashback
- AMZShark, 20% cashback
- Ecomdash, 20% cashback
- Kibly, 20% cashback
- SellerApp, 10% cashback
- Sellercare, 20% cashback
- FeedbackWhiz, 20% cashback
- Shopkeeper, 20% cashback
- ZonGuru, 20% cashback
So, if you plan to try or use any of the tools above, and you don’t have existing accounts, you can get more from the Seller Card.
Who Can Qualify for a Payability Account?
If you’re not an online merchant, you will need to look elsewhere for capital options. Payability only offers services to eCommerce sellers. Though, if your business involves retail on eBay, Shopify, Amazon, Jet.com, Tophatter, or another online marketplace, this might be a good option for you. Just make sure you meet the minimum requirements for the service you apply for.
None of Payability’s services are based on credit. Nor will they report your card use to the business credit bureaus.
Recommended Reading: 30-Day Net Vendors to Build Business Credit
How Do Payability Alternatives Stack Up?
Now, before you apply, you should know your options. And, payability definitely isn’t the only eCommerce funding choice on the market. Here’s a comparison of some of the top alternative funding sources for online merchants.
| Cost/Fees | Rewards | Boosts Credit | |
| Payability | 0.5-2% | 2%+ Cashback | No |
| Amazon Lending | 6-19.9% | No | No |
| Shopify Capital | ~1.1 Factor Rate | No | No |
| Square Capital | ~1.1 Factor Rate | No | No |
| Stripe Corporate | 0% | No | No |
| Business Credit | 0%+ | Vary | Yes |
Conclusion
Payability is a trending source of working capital for eCommerce merchants, and for good reason. They seem to make every step of the funding process super convenient. There will always be the occasional naysayer and your repayment costs may vary based on time and funding amount. Many online sellers are indeed satisfied with their decision to leverage Payability’s financial services.
If you’re looking for a business line of credit to fund your e-commerce/Amazon business beyond Payability, there are some great options from local community banks and credit unions. You can obtain $100,000 in just 30 days without the need to show financials or pay high rates, click here to get started.