(Bloomberg) — America’s largest meal-delivery service, DoorDash Inc., is launching a financing arm to offer business loans to restaurants on its app.
With DoorDash Capital, merchants will be able to apply for financing for business operations such as purchasing equipment, paying rent, hiring and payroll, the San Francisco-based company said Wednesday.
Chief Revenue Officer Tom Pickett wrote in a blog post, “As we continue to listen to our partners and customize our services and offerings to meet their needs, a key area where they have sought support is capital. quick and easy access.”
Working with Paraffin Inc., a fintech startup for small businesses, DoorDash Capital will determine a repayment structure based on a restaurant’s revenue. Eligible merchants can view cash advance offers within the app and accept the terms without additional paperwork or impact on their credit scores. The funds will be disbursed within one to two business days.
The funding is the latest effort from the venture DoorDash, which captured 58% of the market for food-delivery in the US as of December, to expand into new revenue streams. In October, it introduced sponsored listings to boost its advertising business.
DoorDash also follows restaurant-software company Toast Inc., which launched a credit product in 2019, and payment processing firms such as PayPal Holdings Inc., Stripe Inc. and Block Inc., (formerly Square) have arms of their own financing. Huh.
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