Shopify is widely known for giving independent merchants a platform to start, run, market and manage their businesses.

But over the past five years, the company has been steadily growing another part of its own business: Shopify Capital. Through this arm, the Canadian commerce giant revealed today that it has provided $2 billion in funding to tens of thousands of entrepreneurs.

Besides being a cool milestone, how it works is interesting. Merchants don’t necessarily have to apply for loans. Shopify’s machine learning models identify eligible merchants based on their previous sales history and store performance, according to Solmaz Shahalizadeh, vice president of data science and engineering, commerce intelligence at Shopify. If a merchant accepts a pre-approved offer, they can generally receive funding in two to five business days.

While the milestone is significant, I was especially intrigued by the model by which Shopify lends money to its merchants.

It is intentional about using machine learning and AI “to make sure offers are based on factors different from any other in the financial industry,” Shahalizadeh said. “We don’t ask for a business plan. Our models see the business performance and its potential and makes an offer based on that.”

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