Can I close down and stop paying Shopify capital

[slimjim1009]

Hey all,

Looking for some advice mainly shopify related.

Been trading online for a couple years and the last 6-8months seen a big decline in sales so decided to announce a closing down sale to shift stock we have. Last year we did a shopify loan and it was paid back so was offered to take out another which we did for some stock and since that it’s not gone great.

We owe £9,700 on the shopify capital so I emailed the person who we spoke to about the loan and I’ve receive an email from a recovery analyst at shopify as I wanted advice what to do.
They’ve stated what we owe and can offer a settlement figure of £3700 or we pay £928 per month to clear this and it’s being offered for 5 days.
Currently we don’t have the £3700 hence why we’re closing down but also we won’t be completely closed for at least 1-2 months while we move out our office which has to be paid so Would still pay the percentage from sales and when we actually close see if they could offer a settlement figure then but 5 days is too soon to accept…

Also if we decided to close our business and not trade what could happen? I wanted to try and keep my website but make it seem closed with the password entry but wouldn’t have stock to sell.

This is quite a worry for us as i don’t want to be forced into this as they haven’t given much option or time limits right now.

 

[japancool]

First of all, are you a sole trader or a limited company?

Second, what did the terms and conditions of the loan say? Did it mention a personal guarantee?

 

[slimjim1009]

First of all, are you a sole trader or a limited company?

Second, what did the terms and conditions of the loan say? Did it mention a personal guarantee?

We are a partnership as it’s Me and the wife. We deregistered from vat this year as we haven’t hit the threshold.

I’ll need to read the terms and conditions on the loan.
Is there a section it may mention . Personal guarantee? And what does this mean if anything ?

 

[japancool]

We are a partnership as it’s Me and the wife. We deregistered from vat this year as we haven’t hit the threshold.

I’ll need to read the terms and conditions on the loan.
Is there a section it may mention . Personal guarantee? And what does this mean if anything ?

Since you were a partnership, even if you dissolve it, you will both be "jointly and severally" liable for the debt, meaning Shopify can pursue either one of you, or both, for the whole value of the debt.

They could get a county court judgment against you, and for £9700, they could take you to the High Court or in the worst case, make you bankrupt. I don't know how aggressive they are in pursuing debt.

It would be in your interest to take their offer and come up with the money to settle it. Or negotiate to see if you can get the amount down further. Make them a sensible counteroffer.

 

[WaveJumper]

A good lesson for others always make sure you understand what you are signing especially if you are borrowing money.

 

[Lisa Thomas]

You need to take insolvency advice. As Japancool has pointed out you are at risk of Bankruptcy being brought against you both. If you have assets, such as equity in property, these will be at risk.

 

[slimjim1009]

Update on the shopify capital. I emailed back and asked for a second solution to give us 4 weeks to do a closing down sale and generate funds for the fee but also offered a settlement of £3400 which was accepted to clear our loan with them. I’m surprised they took a lesser amount but ended up being a good email conversation with them

 

[Frank Wessely]

Update on the shopify capital. I emailed back and asked for a second solution to give us 4 weeks to do a closing down sale and generate funds for the fee but also offered a settlement of £3400 which was accepted to clear our loan with them. I’m surprised they took a lesser amount but ended up being a good email conversation with them

Hopefully a manageable and positive result for you. Well done. I have seen other similar Platforms adopt a hard line approach.

Using an "old style" Partnership as a trading vehicle can come back and bite you if trading difficulties arise. It's always best to choose a suitable business vehicle at the outset and understand the potential risks if it hits a sticky patch.

Thanks.