Payability Review: Reliable Financing for Marketplace Sellers

Payability Review: Reliable Financing for Marketplace Sellers

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Payability is an online lender which focuses exclusively on e-commerce sellers. So if you’re a seller on such marketplaces as Amazon, Jet or Walmart, Payability provides advances based on your sales. It’s a convenient, though expensive, financing solution for those who bring in enough revenue, but don’t necessarily have the credit history to qualify for a traditional loan.

Payability: Should you apply?

  • on Payability's secure website
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Payability focuses exclusively on e-commerce sellers; if you aren’t one, there’s no point in applying, as the platform will not be helpful to you. If you are part of this demographic, though, Payability charges some of the highest rates on the market. However, it does offer a rewards program through its cashback Seller Card, which can also be used to receive (and spend) a Payability advance. Such convenience may be attractive, especially if poor credit or lack of credit prevents access to lower-cost traditional business loans. Such lenders may also have higher income requirements but offer more, while others may offer you less with lower income requirements. The most you can borrow with Payability is $250,000.

What does Payability offer?

Payability offers e-commerce sellers cash in exchange for a portion of future sales. One product gives sellers access to the funds they have already earned but have yet to be released, while the other allows e-commerce sellers to borrow a lump sum to be repaid over a 20-week repayment period. Cash and capital advances are notorious for being expensive ways to borrow, and Payability’s fee structure makes both of these programs some of the most expensive of the lot.

Instant Access from Payability

  • Borrow up to 80% of your marketplace sales revenue with no min or max
  • 1.00 - 2.00% transaction fee

Instant Access allows you to gain access to 80% of your marketplace sales revenue the day after a sale is made. The remaining 20% minus fees is remitted to you when your payment clears the marketplace platform. The 1.00 - 2.00% transaction fee may be lower for high-volume sellers. In order to qualify for Instant Access, you must have at least three months of selling history with an average of $2,000 in monthly revenue.

Instant Advance from Payability

  • $5,000 to $250,000
  • Weekly flat fee of 0.75% of the total amount borrowed

The other program, Instant Advance, offers you what is essentially a high-cost, short-term loan against your future sales. You can qualify for up to $250,000, as long as the amount is within 75% to 150% of your monthly sales revenue. You will only qualify if generate at least $10,000 in monthly revenue.

Rather than charging interest as with a traditional business loan, Instant Advance comes with a flat fee of 0.0075 of the total amount borrowed, per week; these fees may be lower if you generate more than $50,000 in sales per month. If you pay off the principal early, you will receive a refund for the fees which would have been charged had you repaid over the full, standard, repayment period (20 weeks). Payability takes 25% of your monthly sales revenue until your debt is paid off under a typical repayment schedule.

Collateral is not required but sellers must guarantee that they sell valid goods and follow the rules of the marketplace on which they’re selling.

Additional Payability features

Payability is an easy-to-use platform, but unfortunately it does not come with an app yet. While that may change in the near future, you can still access the site via your phone’s internet browser to easily apply.

Another way to access Payability’s offerings is to use its Seller Card with either Instant Access or Instant Advance. When you make any purchase with this card, you earn 2% cash back. Plus, when you purchase specific seller tools, you’ll earn 20% cash back.

On top of cashback benefits, the Seller Card allows you to quickly access your money on a VISA card you can use anywhere, rather than waiting for it to transfer to an external bank account. You can make the transfer if you want to, but if time is of import you don’t have to wait to spend.

Do you qualify for Payability?

To qualify for Instant Access, you must have been in business for at least three months with $2,000 in monthly revenue in order to qualify. To qualify for Instant Advance, you must have been in business for at least nine months with $10,000 in monthly revenue in order to qualify.

  • Minimum personal credit score: No minimum
  • Minimum annual revenue: $2,000 in monthly revenue for Instant Access. $10,000 in monthly revenue for Instant Advance.
  • Minimum time in business: Instant Access requires three months. Instant Advance requires Instant Access requires nine months

You will also have to work with one of the following platforms with which Payability links:

  • Amazon
  • Walmart
  • Tophatter
  • Shopify
  • Newegg
  • Etsy
  • BigCommerce
  • Tradesy

How to apply for Payability

Before you apply for Instant Access or Instant Advance, you will want to ensure you have the following information ready:

  • Basic identifying information, such as name, address, email, phone number, etc.
  • Basic seller/business information
  • Information required to grant Payability access to your seller account

Once you have everything ready, you’ll be able to create an account and then apply online. This is the only way to apply, but if you want someone to help you through the process, you can seek assistance via phone at (646) 494-8675 or email at [email protected]

Payability versus other comparable lenders

Payability vs. Payoneer

Payoneer is another payment platform which links with your merchant accounts, among other functionalities. Currently, it only offers working capital like Payability’s Instant Advance to sellers who use Amazon and Walmart and advances like Payability’s Instant Access for sellers who want to use money they’ve already made on, an e-commerce site that works frequently with Chinese vendors.

Instant Advance can be dramatically more expensive than Payoneer’s Capital Advance option, which comes with a flat fee, charged once, starting at 2% — as an example, on a $40,000 advance from Payoneer, you’d only pay $800 in fees. An advance of the same amount from Payability would cost you $7,500 over a typical repayment period of 20 weeks as its fees are applied weekly.

Instant Access is also more expensive than Payoneer’s Capital Advance option for Wish sellers — Payability’s fee of 1% to 2% is beat out by Payoneer’s lower fees of 0.6% to 1%.

Payability vs. United Capital Source

United Capital Source offers a similar — though not identical — product to Payability’s Instant Advance. The amount you can borrow is still based on your revenue. However, rather than a weekly fee, you are charged an interest rate of at least 9%. You will make daily payments until the balance is paid in full, with United Capital Source taking a portion of your sales until it is.

Your credit does matter for United Capital Source’s Revenue Based Business Loans. While it’s not a hard mandate, most people the company approves have a credit score of at least 525. Terms are much longer than Payability’s, starting at three months and extending to a potential 10 years.

Payability vs. Fundbox

  • on Fundbox's secure website
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Fundbox offers small business owners lines of credit based on their annual revenue and FundBox Pay. Fundbox Pay is somewhat akin to Instant Access. When your customer chooses to pay their bill over time rather than in one lump sum, you will be able to access an amount equal to the final sale in exchange for a fee. The fee for sellers depends on the terms offered, but is 2.9% for Net-60 terms — a Net-60 term means customers pay no fees as long as they pay within 60 days.

Fundbox line of credit When you apply for a line of credit, Fundbox will do a soft pull on your credit report, but that does not affect your credit score. While Fundbox requires a minimum revenue of only 50000, less than half of what Payability’s Instant Advance requires, the average Fundbox borrower generates around $250,000 in revenue annually. Payability has weekly fees, but Fundbox charges weekly interest. These interest rates start at 4.66% on 12-week terms and 8.99% on 24-week terms.

It may look like these rates are higher than Payability’s 0.75% weekly fee, but a $50,000 advance from Payability would end up costing you $7,500 in fees over the course of repayment while pulling from a line of credit at Fundbox would only cost you $4,495 in interest over the course of repayment. This is because of the different ways in which fees and interest are calculated.

Justin is a Sr. Research Analyst at ValuePenguin, focusing on small business lending. He was a corporate strategy associate at IBM.

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