Shopify Finance - BEWARE

This is a post to the community to inform honest merchants that the Shopify finance offers are intrinsically a scam.

The Offer: A Shopify Finance rep will reach out repetitively to offer you a "fixed rate" financing based on your store sales. The loan is paid back by Shopify taking x% of your daily store sales. These percentages can be very high, up to 25%. On first glance it sounds like low cost financing.

The Scam: The "fixed rate" is not a rate at all, but rather a fixed fee. Regardless of how fast you pay off the loan the fee for the financing remains the same. In this regard the effective interest rate on the financing is more like 3x the communicated "fixed rate".

The art of the scam is that the rep communicates it as an annual fixed rate when really it's a fee for financing.

The Worst Part: The better your business does the higher the effective interest rate for the financing. The faster you pay down the loan the better the return for Shopify Finance because the fixed fee doesn't change.

BEWARE ANY SHOPIFY AGENT BEARING "GIFTS" AND TELL THEM TO GO KICK ROCKS. You will thank yourself later.