Certain eCommerce companies rely on marketplaces like Amazon to do business. Unfortunately, marketplace platforms sometimes take several days, weeks, or months to release a seller’s payout.
That’s where Payability comes in. The online financing company seeks to help small business entrepreneurs solve cash flow issues in the eCommerce space. Payability doesn’t consider your credit score or run a credit check when approving applications.
With account receivables coming in later but account payables due every day, Payability puts the money from marketplace sales back in the hands of the seller. Their product Instant Access gives users up to 80% of the previous day’s revenue – and it adds each day you’re enrolled, even on weekends. The remaining 20% becomes available when the marketplace makes its standard payout.
They also offer Instant Advance, providing immediate funding repaid with future receivables. The product is like a merchant cash advance but tailored specifically to the eCommerce business segment.
There are some drawbacks you need to be aware of, however. If you’re an eCommerce business owner and want to know if Payability is right for your business, we can help guide you in this Payability review.
Specifically, we will answer the following:
Payability provides business financing options to eCommerce businesses or sellers using Amazon, Walmart, New Egg, or Shopify marketplaces. They have two main products: Instant Access and Instant Advance, and customers can also use the Payability Seller Card.
The purpose of Payability is to help eCommerce sellers get the funds they need to support cash flow, purchase more inventory, and grow their business.
If you sell products on an eCommerce platform like Amazon, you could potentially wait weeks for payouts from your sales. The delay can cause interruptions to cash flow and limit your growth.
For sellers needing fast funding, Payability’s products put the funds in your hands faster.
Payability Instant Access makes 80% of the previous day’s marketplace sales available instantly. Users access the funds in their Payability account. The remaining 20% becomes available as the marketplace releases funds from your payout. Sellers get the funds each day, even on weekends. You need to give a 30-day notice to unenroll in the program.
Payability charges a 2% fee of the previous month’s sales to use the product. It’s the only fee sellers have to pay. There is no origination or prepayment fee. Sellers doing more than $100,000 in monthly sales revenue might qualify for a discount.
The Payability Instant Advance operates like a Merchant Cash Advance but with some unique features. Sellers get an upfront amount based on their sales history, which is then paid off with future sales.
Sellers typically get 75% to 150% of their previous month, up to $250,000. You then repay the loan with a percentage of future sales, usually between 12%-25%, until the loan is repaid.
Fees range between 0.5%-1% per week. Paying the loan back early saves on fees, and there is no prepayment penalty.
Payability also offers a card exclusively for eCommerce sellers. The Payability Seller Card is compatible with both of their financing products.
Instead of transferring the money to your bank account, you can use the Seller Card as a debit card for your Payability funds. You can use the card like a debit card for most transactions.
The Seller Card features 2% cashback on all purchases, and it is a physical card you can carry in your wallet or use online.
One of the most significant advantages Payability offers is the ease of qualifying. There is no minimum personal or business credit score requirement, and they do not run a credit check.
All you need to qualify is the meet the sales numbers required and pass a standard background check. Let’s review the qualifications for each product type.
To qualify, users need the following:
To qualify, users need the following:
Their funding services are only available to eCommerce sellers. Because they focus exclusively on this niche business market, their products and services are tailored specifically to solve the challenges in the space.
You can only use Payability if you sell on one of the following eCommerce platforms:
Payability seeks to solve the cash flow issues that prevent sellers from reaching their full potential on those platforms. Most don’t release funding for sales for days or even weeks after the sale occurs.
The Instant Access product gives users early access to funds they might otherwise need to wait weeks to obtain by making 80% of the previous day’s sales available. Customers can use the funds to purchase additional inventory or cover other expenses.
The quicker turnaround time to reinvest sales revenue into the eCommerce business helps sellers grow. The cash advance product also enables users to expand their business.
You should be aware of the fees and costs, however. You’re charged 2% of gross or total sales for the Instant Access product. Total sales mean the amount of total amount of revenue before any refunds, chargebacks, or returns.
Since total sales are often more than net sales, the actual payment could be higher than 2% of your take-home revenue. On the converse side, there are no additional fees with this product.
For Instant Advance, Payability charges 0.5%-1% weekly. You can repay the funds sooner to reduce your total fees. Repayment comes from your future sales, so be sure your project revenue can handle the payment amount.
The application process for both financing options is similar, but there are some differences in how you apply. Let’s break down the application process for each product type.
The first step is the fill out the application. You will provide basic information about yourself and your sales revenue by month.
When you apply to Payability, you’ll connect your marketplace API to the Payability dashboard. Payability states the application process takes about 10 minutes or less.
Payability states you can get approved and funded in as little as one business day.
Your funds become available in your Payability account when you’re approved. After receiving the funds, you can either use the Seller Card or transfer the funds to your business bank account.
You will fill out the application and create a Payability profile. Once you make the profile and submit your business information, Payability evaluates your business and financial health.
Payability then creates the best possible offer based on your marketplace sales history. There are no credit checks, but they will conduct a routine background check.
The Payability website states they work on a financing package with appropriate funding for your growth strategy and plans.
Once approved, the funds become available in your Payability account. Users can transfer the funds to their bank account with Same Day ACH or Instant Transfer. Using the Seller Card, you can also spend the funds right from your Payability account.
Payability charges you 2% of the previous month’s gross sales for Instant Access, also called total sales. Remember that total sales are before any refunds or returns, so the amount you’re paying differs from your actual payout amount.
For the Instant Advance product, you’re charged 0.5%-1% per week. Your repayment comes from future sales, so you want to ensure you can afford the payments. Paying it back earlier means paying a lower total for fees.
While both fees can stack up high, they’re competitive with similar products in the eCommerce space. In addition, you don’t have to worry about other fees like origination fees.
The most significant advantage of Payability is as a solution to a unique need in the eCommerce space. Amazon and other online sellers sometimes need access to their payouts sooner than the platform provides it. Payability lets you access those funds to help your business with cash flow issues.
In addition, their Instant Advance product takes the traditional merchant cash advance model and adds some unique features to customize it for marketplace seller businesses. Borrowers can use Instant Advance to grow their online sales business.
The application process is quick and easy, often taking less than 10 minutes to complete. Credit approval is easy if you meet the sales history and revenue requirements. One of the most significant advantages of Payability is that they do not run a credit check.
Approval and funding are both reasonably fast. Receiving approval and access to funds within 24 hours of applying is possible.
Customers also get the Payability Seller Visa Card. The Seller Card gives 2% cash back on all purchases and lets customers use their funds immediately. Instead of waiting for your Payability funds to transfer to the bank, the Seller Card lets you use the funds in your account.
There are some negatives to Payability, and you should weigh your options carefully. Payability can be valuable if you plan and are aware of the disadvantages.
The most significant disadvantage of Payability is the high cost of financing. With a weekly Instant Advance fee of 0.5-1% and Instant Access fees coming from 2% of gross sales – not net sales – you can end up paying a decent amount for their services.
Instant Access customers must give a 30-day notice to cancel enrollment. For some users, that wait is too long, especially if you’re unhappy with the fees.
Payability also has some potentially confusing terms and fees. In particular, the reports cause some confusion, and some users claim they were overcharged on fees.
Another issue is frozen accounts. While this is typically an issue on the marketplace side, Payability continues to assess fees when an account is frozen. Getting hit with fees when you don’t have sales revenue can cause genuine frustration with the service.
Finally, as mentioned, Payability is specifically for eCommerce businesses selling in one of the leading marketplaces. While that is an advantage for that group, it’s a disadvantage for anyone seeking Payability products.
Pros:
Cons:
Payability has a 4.6 out of 5 rating on Trust Pilot. The mostly positive reviews discuss how Payability helped create consistent cash flow for their eCommerce business.
Other positives included the ease of the application process and getting approved without a credit check. Some customers praised the excellent customer service, although that was not universal, as we will discuss next.
However, some negative reviews signal potential red flags with Payability. Many users complain about the high fees, which stem from the fee being based on total sales instead of net sales.
Another issue is about charges on frozen accounts. Sometimes a marketplace like Amazon will freeze an account for various reasons. While accounts get frozen for user errors, sometimes, it happens through no fault of the seller.
Payability still assesses the monthly fees even if the account is frozen. While there are steps a user can take to reduce their risk, some people end up paying more than they can afford.
There are also complaints about funds disappearing from the Payability dashboard. Payability acknowledges this as a system glitch and states they are working on it.
Some customers also discussed confusing reports, claiming the figures in the reports sometimes don’t match up. Finally, while many users praised the customer service, others stated that limited hours of availability made it difficult to get ahold of customer service and resolve issues.
There are also some complaints that mostly come from confusion over Payability’s Risk-Free Trial. Users can sign up for a 7-day trial before committing to a long-term account. The trial is free from risk because you can cancel the membership. However, some users felt the title was misleading and were surprised Payability’s fees still applied during the trial period. They thought the trial was free from fees as well as risk.
We should note that most negative reviews are over a year old. Payability seems to be actively addressing glitches and other issues contributing to negative user reviews.
Payability is not a business loan because it does not charge interest or has standard loan features like origination fees. Instead, Payability is a custom financing for Amazon sellers, as well as for other marketplaces.
Their main product, Instant Access, makes funds payout funds available to online sellers sooner. They charge 2% of total sales to pay for the Instant Access funding.
Their cash advance product provides a lump sum upfront to finance capital growth, which borrowers repay with future receivables.
So, while the financing Payability offers is similar to some loan types, it is not considered a loan.
Yes, Payability is only for eCommerce small business owners selling on Amazon, Walmart, New Egg, or Shopify marketplaces. Their funding programs are exclusive to this niche.
Since they only deal with eCommerce marketplace sellers, they can customize options to meet the unique needs of this segment. Traditional lenders and banks don’t always understand the business model of small businesses selling on eCommerce marketplaces.
Yes, one of the main advantages of Payability is that they do not run credit checks. Qualifications depend entirely on your strength as a seller in the marketplace.
We should note that Payability does run a background check on applicants, but they do not look at your credit history.
To qualify for Instant Access, you’ll need at least 3 months of selling history and monthly sales revenue of $10,000. For the cash advance, you need 9 months of selling history and an average of $50,000 in sales per month.
Payability fees can run a little high. For the Instant Access product, you will pay 2% of monthly gross sales, which means you’ll pay more than the payout amount.
For example, let’s say your eCommerce business did $17,500 in gross sales for the month. The fee you pay is $350. However, in the same month, you had a few returns and refunds, and your net sales came out to $14,000. 2% of $14,000 is $280, but you’ll still pay the $350.
For cash advances, you’re charged 0.5%-1% per week. The exact percentage depends on how much you borrowed and your business strength. Paying off the advance quicker reduces the total amount you’ll pay in fees.
With Instant Access, you can gain access to funds you’d otherwise need to wait to get. Instant Access can be a valuable lifeline for small businesses needing immediate cash flow.
Let’s say you did $1,200 in sales yesterday, and the funds can help you cover a bill. Instant Access makes 80%, or in this case $960, available to you the next day. You can use the funds to purchase more inventory or cover other business expenses.
Payability Instant Advance gives you additional capital to grow your business. You can get up to $250,000, but the amount is usually 75%-150% of your monthly sales. Imagine you’re averaging about $75,000 in monthly sales. You get a cash advance of 100%, meaning you now have an additional $75,000 in working capital.
You can use the funds to:
Payability has low approval requirements and doesn’t run credit checks. You should receive approval if you meet the monthly sales and selling history requirements.
If you weren’t approved, you likely don’t have the sales revenue or consistent sales history required. There is also a chance you didn’t pass the standard background check.
Another possibility is that you’re not selling on an approved platform. Payability is only compatible with Amazon, New Egg, Walmart, and Shopify. They offered additional platforms before the Covid-19 pandemic, and they may expand again, but as of now, you need to be on one of those four.
But don’t worry; there are other lending options for small business loans if you can’t access Payability’s services. If you’re looking to grow your eCommerce business with a merchant cash advance or invoice financing, plenty of options are available.
Payability offers some significant advantages for eCommerce entrepreneurs, but there are inherent risks with any form of financing. One thing to remember is that Payability specializes in funding for online sellers. While other companies offer similar financing products, Payability’s products are tailored to this market segment.
That being said, you should know about the potentially high costs. The 2% of total sales for Instant Access can really add up. Additionally, the Instant Advance option can be expensive for capital financing.
Even so, the advantages could outweigh the negatives if you need funding now. The fast application and funding time helps solve immediate cash flow issues. The most important thing we can tell you is to carefully read the terms and fine print to avoid the costly pitfalls of using the service. Of course, it’s always important to know the terms and conditions of any business financing agreement – or personal finance, for that matter.
Payability is best for small businesses that might not have the credit score or business model necessary for traditional small business loans. Based on user reviews, product offerings, and ease of use, we rate Payability 3.25 out of 5.
Some customer complaints and the limitations of available platforms hold the company back. But if you’re in the eCommerce space and understand the risks involved, Payability can help you grow your business.
Disclaimer: The Payability trademark is owned by Payability, Inc. and its use herein is for reference purposes only and it does not indicate sponsorship or endorsement from Payability, Inc.
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