US food delivery company DoorDash has announced the launch of DoorDash Capital, a new merchant service that offers loans to restaurants through its app.
Through DoorDash Capital, eligible merchants can access revenue-based financing to support their growth plans, manage day-to-day operations with additional cash flow, and invest for the long term.
These loans can be used by traders to meet their business needs such as purchasing equipment, marketing expenses, rent, hiring, and payroll.
DoorDash Chief Revenue Officer Tom Pickett said: “As we continue to listen to our partners and tailor our services and offerings to meet their needs, a key area they have asked for assistance in is the quick and easy access to capital.
“That’s why today DoorDash is introducing DoorDash Capital, a new merchant service that provides fair and convenient access to funding for eligible merchants.”
For this initiative, DoorDash is working with fintech company Parafin to offer revenue-based financing to eligible merchants.
In the Merchant Portal, under the “Funding” tab, eligible merchants will receive a pre-approved advance amount.
Upon acceptance of Parafin’s offer, the funds will be deposited into the merchant’s bank account within one or two business days.
Merchants will be required to pay a one-time fee, which can be paid over the term of the advance.
The refund is meant to be simple and automated, as it’s based on a percentage of DoorDash sales.
DoorDash added that the reimbursement structure is based on a restaurant’s performance and can be more flexible than fixed payment periods.
Under the DoorDash Capital pilot program, over 1,000 merchants have taken advantage of this facility for their various trading needs.
Last November, DoorDash agreed to acquire food delivery platform Wolt in an all-stock deal.