DoorDash Inc., the U.S.’s biggest meal-delivery service, 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 to fund business operations such as purchasing equipment, paying rent, hiring and payroll, the San Francisco-based company said on Wednesday.
“As we continue to listen to our partners and adapt our services and offerings to meet their needs, one key area where they have asked for support is quick and easy access to capital,” Chief Revenue Officer Tom Pickett wrote in a blog post.
Working with Parafin 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 can accept terms without additional paperwork or an impact to their credit scores. Funds will be disbursed in as little as one to two business days.
The financing venture is the latest effort by DoorDash, which commanded 58% of the market for meal-delivery in the U.S. as of December, to expand into new revenue streams. In October, it introduced sponsored listings to bolster its advertising business.
DoorDash also follows restaurant-software company Toast Inc., which launched a credit product in 2019, and payment processing firms like PayPal Holdings Inc., Stripe Inc. and Block Inc., (formerly Square) which have financing arms of their own.