Frequently Asked Questions

If you’re new to Loop or looking to understand more about our offerings, this page will help you answer some burning questions.

General

What is Loop?

Think of Loop as the financial partner that will take care of your day to day financial needs, including making sure that you are adequately financed. Starting with a line of credit, once you’re a Loop member you have flexible access to take funds when you need and pay back when you’re ready. We also take care of paying whoever you need on your behalf and understand your business so you always have access to capital to grow your business.

Who can use Loop?

Loop offers products that focus on scaling eCommerce businesses to assist with their growth goals. Loop can be used by any eCommece brand that currently sells through Amazon, Shopify and/or WooCommerce. We support eCommerce businesses that have average monthly revenues of $80,000 CAD with a majority of online sales being Direct to Consumer.


Loop offers its financial products to businesses based in Canada however we aim to directly support corporations based in the US. Email us at contact@getloop.ca if you’d like to become a Loop member and you’re not based in Canada.

Are there any industries that Loop doesn’t support?

We cannot support businesses that are part of the following restricted industries list:

  • Government organizations or bodies, or Entities owned by a government organization or body.
  • Unions, charitable, religious or fraternal organizations or Entities owned by such organizations. Entities that exist as a fundraising vehicle for charities.
  • Entities owned by individuals holding political office.
  • Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability.

What services or products does Loop offer?

Loop is quickly becoming the go-to platform for banking for medium sized eCommerce companies. Loop's primary product is a novel eCommerce line of credit for direct-to-consumer online brands who primarily sell online. This revolutionary new type of revolving credit has a credit limit that grows based on your store's real-time sales data. With flexible payback structures and a remarkably easy application process, it's no wonder Shopify stores like Emmy Deveaux and Amazon sellers like PrimePure choose Loop as their primary financing method for inventory (check out their case studies here!)

Once you obtain Loop's ecommerce line of credit, a number of features become available to you on our platform. Starting with the recently launched Supplier Pay feature which was suggested by one of our clients, and implemented by our engineers in record time to give you the ability to pay a supplier directly from your line of credit. This allows you to save on foreign exchange fees and avoid having to move money around between your bank accounts.

Loop will always make sure to take care of any financial need you have. Just message us and we’ll work with you to provide you with a solution.

Can anyone on my team apply for the line of credit?

Loop requires the business owner of the eCommerce brand to apply for a line of credit through Loop. In order for our team to understand how much credit we can extend to you, we will need to access your tax information directly from the CRA. For this, you will need to authorize Loop as an authorized representative in your MyCRA online account - giving Loop read-only access to your account.

How is Loop different from other alternative lenders?

Many alternative lenders focus on financing eCommerce technology businesses however our goal is to make sure that we are doing all we can to support any day-to-day financial needs you have to ensure you are well equipped to achieve the growth goals you set for your business. 

‘Cash advance’ products take a fixed fee associated with each advance. Whilst they don’t have any periodic interests, repayment is made from your future daily or weekly business revenue. A percentage of each transaction is applied until the alternative lender recoups the capital provided to you in full, plus the fees. The most detrimental characteristic of this type of financing is that the business owner's cash flow is suffocated by the payback structure, and the accompanying interest rates are very high. It is likely that your APR on this kind of loan is somewhere between 42% and 77%. This is due to the total number of days it takes for you to pay back your ‘cash advance’. 

By comparison, if you were to borrow at an APR of 18% with Loop, the total interest/fees that you would pay over the same timeframe would be less than half the cost of a ‘cash advance’ product. 

Loop's line of credit on the other hand, gives you access to a fixed amount of credit that you can draw on at any time and allows you to pay it back on your own terms without sacrificing cash flow. This means that with Loop's line of credit, a mid-sized eCommerce company is much better equipped to scale as their cash flow is left intact and interest rates are considerably lower than merchant cash advances.

Eligibility

What are the minimum requirements to qualify for Loop?

We look to support high-growth eCommerce brands that are incorporated in Canada and that currently generate an average monthly sales of $80,000 CAD through Amazon, Shopify and/or WooCommerce. We also require that at least one of the business owners has a minimum FICO score of 600. 


Loop offers lines of credit to businesses based in Canada however we aim to directly support corporations based in the US. Email us at contact@getloop.ca if you’d like to access our solution and you’re not based in Canada.

How do you compute the credit limit given to businesses?

The credit limit is based on your monthly sales, most recent balance sheet & profit and loss statement, and inventory purchase history. Data from these sources are used to perform a financial analysis that ultimately calculates the annual free cash flow generated by the business. This is then used to arrive at a credit limit the business can comfortably service.

Can I check how much credit I could qualify for before applying?

We understand businesses like yours are keen to move quickly and first need to understand how much credit you may qualify for. This is why our team developed a credit estimator. We compare your revenue, sales growth and industry metrics with our portfolio companies as well as a more generic data set of Canadian businesses. You can access this tool by visiting this the Loop Estimator page.

Using Loop

What can I use my line of credit for?

Your line of credit can be used to fund the growth of your business. You can use your line of credit for any working capital expenses including but not limited to inventory financing, marketing ad spend, or hiring new talent.

Can I use my line of credit to pay my supplier?

We’re glad you asked! In minutes, you can now pay your supplier directly from your line of credit. This allows you to save on foreign exchange fees and avoid having to move money around between your bank accounts.

Can I use Loop with my 3PL and/or Logistics provider/technology?

We currently do not have any product integrations with 3PL companies however we work closely with them due to the synergy in our goals to help you grow your business - specifically your order turnover. Email us at contact@getloop.ca if you’d like to discuss how we can integrate your line of credit with your 3PL technology partner.

How do I pay back my line of credit?

Automatic debit payments are a great way to ensure that you pay your minimum monthly payments on time. Loop requires all clients to pay down 6% of their last statement balance seven days after their statement due date. 

Direct Debit collection time frames vary, so please ensure you check with your Account Manager and your Loop Dashboard to find out when your Direct Debit will be collected.

You can also make a payment of all or part of your Outstanding Balance amount at any time by emailing payments@getloop.ca. Please include your Account ID and the amount you wish to transfer.

Fees

What fees does Loop charge?

When you become a Loop member, you automatically get access to products that will help you scale your business. Visit our pricing page here to understand our different pricing tiers. Our monthly fees will be added to your total outstanding balance and every month you will only need to pay back 6% of your outstanding balance. This enables businesses like yours to get the payback flexibility required to run a high growth eCommerce business. Pretty sweet. And then you throw affordable interest rates, flexible pay back structures and low foreign exchange rates. 

 Our monthly borrowing rates start at 0.75%.

How does Loop make money?

Loop makes money through the 1% withdrawal fee whenever you withdraw funds from your line of credit or withdraw funds to pay your supplier. Over time, we will likely build premium features that save you time on banking services that will enable your business to scale.

Security

How do you keep my data safe?

We take the security of our clients and your capital very seriously and will always exceed security standards for financial and data security. All of your data and personal information is stored securely with leading software providers, just like it would be at any financial institution. As an eCommerce brand, you can have total peace of mind about your finances. If you’re interested in learning more about how we protect you, you can review our Privacy Policy.

Does Loop take any personal guarantees?

Loop requires an unsecured personal guarantee from all individuals that own 25% or more of the business. 

To clarify this is a business debt and the business is liable for the debt. However, should the business not be able to service the payments the following steps will be taken: 

  1. Work with our in-house Recovery team to put in place a business payment plan to get the business back on track
  2. Business assets assessed to cover the outstanding debts
  3. Work with our in-house Recovery team to put in place a fair and attainable personal payment plan 

Ultimately, Loop is focused on ensuring businesses survive and grow as this is the best outcome for all parties involved. As long as you are demonstrating an effort to repay your outstanding debts we are committed to working with you to find the best solution. 

Integrations

Why do I need to integrate my sales channels?

During the onboarding process, we will ask you to integrate your sales channels. We will only need you to do this once and we will never read or access any of your customer’s data. The credit line that we offer you is directly impacted by your monthly sales on Amazon, Shopify and/or WooCommerce. Also, we need access to your monthly revenue growth data to be able to review your credit limit every month and notify you if we’re able to increase this.

What data do you collect after I integrate with a sales channel?

Once you connect your sales data, we’ll review only information about your business and your sales transaction data. We will use this information to put together the most optimal offer for your business. 

We never change or edit your transaction data or access your customers or supplier data.

How would my credit limit be affected, if I disconnect my sales integrations?

The business will not be eligible for monthly credit limit increases if sales integrations are disconnected. Under unique circumstances if the integrations are disconnected and the client is not willing to reconnect it could trigger an event of default under the terms of the loan agreement.

Have any other questions?

Email us at contact@getloop.ca!