If you're running an Australian ecommerce business doing between $500K and $5M annually, you've probably received funding offers from Shopify Capital, Wayflyer, or PayPal Working Capital. They pop up in your dashboard, promising instant cash with zero paperwork.
I get the appeal. Last month, I spoke with Sarah, who runs a $1.8M skincare brand from Melbourne. Shopify Capital offered her $200,000, and she could accept it with literally one click. No applications, no waiting, no questions asked. The money would hit her account within 48 hours.
She almost clicked accept. Thank god she called us first.
Here's what Sarah discovered when we ran the numbers. That $200,000 from Shopify Capital would have cost her $250,000 to repay – a factor rate of 1.25, which sounds reasonable until you realize she'd repay it through daily deductions over just 8 months.
The real kicker? We helped her secure a $200,000 business loan from a non-bank lender at 14.9% per annum instead. Total interest over 12 months: $16,454. She saved over $33,000 and got better payment terms that didn't strangle her daily cash flow.
But Sarah's story isn't unique. After working with hundreds of Australian ecommerce businesses at Splendid, I've seen this pattern repeatedly: smart business owners paying 40-60% effective annual rates to Wayflyer, Shopify Capital, or PayPal Working Capital when they could easily qualify for rates between 12-24% elsewhere.
The problem with Shopify Capital, Wayflyer, and similar services isn't that they're scams – they're legitimate funding options that serve a purpose. The problem is that most business owners don't understand what they're really paying.
These companies don't charge interest rates. Instead, they use "factor rates" – typically between 1.1 and 1.5. Sounds modest, right? But when you're repaying that advance through daily sales deductions over 6-12 months, the math gets ugly fast.
Take Marcus, who runs an outdoor equipment store in Sydney doing $2.1 million annually. In March, he accepted a $200,000 advance from Wayflyer to stock up on camping gear for spring. Wayflyer started taking 12% of his daily sales immediately.
Here's what Marcus didn't consider: camping gear doesn't sell strongly until September. For six months, he watched Wayflyer pull cash from his account daily while his new inventory sat in the warehouse. By the time camping season arrived, he couldn't afford to properly market his products. The very funding meant to fuel growth ended up constraining it.
Shopify Capital, Wayflyer, and PayPal Working Capital have brilliantly solved real problems in business financing. Traditional banks often take weeks to approve loans, require extensive paperwork, and frequently demand property as security. For a fast-moving ecommerce business, waiting six weeks for funding can mean missing crucial opportunities.
These platform-integrated lenders offer something banks can't: instant decisions based on your actual sales data. They already have access to your transaction history, so there's no need to prove your revenue. It's seamless, integrated, and requires zero effort from busy business owners.
The convenience is intoxicating. And for businesses that genuinely can't qualify for traditional financing, these services provide crucial access to capital. The problem is that most established ecommerce businesses doing over $500K annually don't realize they have better options.
Here's what surprised me when I first started helping ecommerce businesses: the Australian non-bank lending sector has evolved dramatically over the past five years. Companies like Banjo, Lumi, ScotPac, and others now specialize in unsecured business loans for growing companies.
These aren't shark lenders. They're sophisticated financial institutions that understand modern business models. They can assess an Amazon FBA business or dropshipping operation as easily as a traditional retailer. Most importantly, they offer real interest rates – typically 12-24% annually – not factor rates that disguise the true cost.
The application process has been streamlined too. Where banks might take 6-8 weeks, non-bank lenders typically approve within 48 hours and fund within 3-5 days. They'll review your bank statements electronically, connect to your accounting software, and make decisions based on cash flow rather than assets.
For businesses with stronger financials, traditional banks remain an option too. Yes, they're slower and pickier, but if you can qualify, you're looking at rates as low as 7-12% annually. On a $300,000 loan, the difference between 8% and Wayflyer's effective 40% rate is over $96,000 in a single year.
The most insidious aspect of Shopify Capital, Wayflyer, and PayPal Working Capital isn't just the cost – it's the daily deduction model. Every single day, they take their cut before you can use those funds for inventory, marketing, or operations.
This creates a vicious cycle. Lower daily cash flow means less money for growth initiatives. Less growth means extending the time to repay. Extended repayment periods mean more total cost. It's a hamster wheel that's hard to escape once you're on it.
Compare this to a traditional business loan or line of credit. You make monthly payments, maintaining full control over your daily cash flow. During busy periods, you can reinvest aggressively. During slower times, you can conserve cash. This flexibility is worth more than most business owners realize until they've lost it.
Even better, with a line of credit, you only pay interest on what you actually use. Approved for $300,000 but only need $100,000 this month? You're only paying interest on $100,000. Try getting that flexibility from Shopify Capital.
Switching from Wayflyer or Shopify Capital to strategic financing feels daunting, but it's simpler than most assume. The key is preparation and timing.
First, gather your financial documentation while you're not desperate for funding. You'll need 12 months of bank statements, recent tax returns or BAS statements, and ideally a basic understanding of your monthly cash flow. Don't worry if everything isn't perfect – non-bank lenders understand that growing businesses rarely have textbook finances.
Next, calculate what you're really paying to Shopify Capital or Wayflyer. Add up all fees paid over the past year and calculate the effective annual rate. This number usually provides the motivation needed to explore alternatives.
The application process for non-bank lenders typically takes 3-5 days from start to funding. Unlike platform lenders who auto-approve based on limited data, these lenders want to understand your business. They'll ask about your model, growth plans, and use of funds. This isn't bureaucracy – it's them investing in your success.
Once approved, you can use part of your new facility to pay off existing platform advances if needed. The immediate relief of escaping daily deductions often surprises business owners. Suddenly, that 10-20% of daily revenue returns to your control.
I'm not suggesting these services have no place. For true emergencies requiring sub-48 hour funding, they're unmatched. If you spot an incredible inventory deal expiring tomorrow, clicking accept on Shopify Capital beats missing the opportunity.
They're also valuable for very new businesses or those with challenged credit who genuinely can't qualify elsewhere. If you're choosing between Shopify Capital and not having working capital at all, take the funding and use it to build your business to the point where you can access better options.
But for established ecommerce businesses using Wayflyer or Shopify Capital as their primary funding source? You're leaving serious money on the table. Money that could hire another employee, fund better inventory, or simply improve your bottom line.
The Australian ecommerce sector has matured beyond needing to accept whatever funding appears in our dashboards. With online retail now representing over 16% of total retail sales, lenders actively compete for ecommerce business.
At Splendid, we work with over 40 lenders and have helped hundreds of ecommerce businesses transition from expensive platform funding to strategic financing. The savings are real and immediate – often $30,000 to $100,000 annually for businesses in the $1-5M revenue range.
The question isn't whether you can access better financing than Shopify Capital or Wayflyer. If you're doing over $500K annually with consistent revenue, you almost certainly can. The question is how much money you're willing to keep paying while you delay making the switch.
Every month you wait is money lost. But more importantly, it's growth constrained and opportunities missed. Your business has outgrown one-click funding. Isn't it time your financing strategy caught up?
Ready to see how much you could save? Splendid specialises in helping Australian ecommerce businesses access better financing options. Book a free consultation.
