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Shopify Capital Review: Pros, Cons & How To Apply

Shopify Capital is the small business financing arm of the highly popular eCommerce platform Shopify Inc. Small business owners using the platform might qualify for a Shopify loan or merchant cash advance.

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Applications are invite-only, meaning the company will message you when your business is eligible. If you received an offer or want to learn more about funding from Shopify Capital, we can help you with answers to these questions:

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    What is Shopify Capital?

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    Shopify, Inc. is a Software as a Service (SaaS) company and one of the leading eCommerce platforms in the world. Shopify services over 4 million business websites, reaching more than 300 million customers.

    A wide range of small businesses use Shopify for their online sales. The company launched in 2006 and went public in 2015.

    In 2016, the company launched Shopify Capital, which provides small business funding options to Shopify merchants. The platform offers two forms of short-term financing: business loans and merchant cash advances.

    At first glance, both products share many similarities, but some key differences exist. However, both products have the same lending range and are repaid through future sales.

    How Does Shopify Capital Work?

    Only Shopify users are eligible. The platform notifies small business owners when their Shopify account becomes eligible.

    Once the platform deems a business eligible, it invites you to apply for funding. Users receive three offers to choose from.

    In most cases, you’ll receive an email saying you’re eligible or approved for financing. You have 30 days to accept an offer. After that, the offers are withdrawn, and you must wait until the company sends another invitation.

    After a business owner accepts the invite and selects a lending offer, Shopify’s underwriting team reviews the application and finalizes the request.

    Rates & Fees

    Before discussing the Shopify Capital merchant cash advances and loan products, you should understand how the rates work. The company doesn’t charge a standard interest. Instead, it sets a borrowing fee called a factor rate.

    The factor rate is either 1.1 or 1.13. The rate you receive depends on your borrowing amount and the strength of your business.

    Let’s say you borrowed $50,000 as a business loan or a merchant cash advance. To calculate how much you owe, multiply the advance amount by the factor rate. If your factor rate is 1.1, then the formula is:

    $50,000 x 1.1 = $55,000.

    The total becomes your fixed borrowing cost and doesn’t change. Now let’s look at how Shopify Capital funding works.

    Shopify Capital Loans

    Shopify Capital Business Loan amounts range from as low as $200 up to $1 million. The amount a business qualifies for depends on sales averages and cash flow. The loan term is 12 months.

    The funds are disbursed to your business bank account within a few business days after the loan finalizes. You can use the money to help grow your business.

    Repayment for the business loan comes from future sales. The company withholds a certain percentage of your daily sales with what they call the remittance rate.

    The average remittance rate is 10%, although it could go higher or lower depending on your loan offer. Using the average, 10% of your daily sales go to repaying the loan.

    For business loans, you also must meet the 60-day milestones. You need to repay one-sixth of the loan every 60 days to ensure you’re on track for the 12-month term.

    Shopify Merchant Cash Advance

    Merchant cash advances operate like a business loan. The borrowing amounts also go from $200 to $1 million, and repayment also comes from the remittance of daily sales.

    The main difference between the two products is the timeline to repay the loan. Borrowers must repay the business loan in 12 months, whereas merchant cash advances don’t have a set cut-off.

    You repay the merchant cash advance from your daily sales. On high revenue days, you’ll repay more of the loan. On low revenue days, the repayment is lower. If your revenue is $0 for a day, you don’t pay anything at all.

    Connect Business Bank Account

    You’ll need to connect your business bank account to receive funds. Since the program is only available to Shopify businesses, chances are your account is already linked. You’ll receive the funds in the same business bank account linked to your Shopify business.

    What are the Qualifications?

    office, business, accountant, bank account

    Shopify Capital doesn’t indicate what makes a business eligible. Since it’s invite-only, you won’t know if you’re eligible until you receive an offer.

    We do know that Shopify Capital doesn’t have any minimum requirements for the following:

    • Credit scores.
    • Annual revenue.
    • Time in business.

    Most lenders use those three metrics as a baseline for minimum qualifications. Shopify Capital doesn’t, which is good news for small business owners with low credit scores, startups, and businesses with low revenue.

    Minimum Requirements

    There are a few minimum requirements that we can discuss. First, your business must be a Shopify store based in the US or Canada.

    Shopify Capital loans are only available in select states. Merchant cash advances are available in every state, as well as in Canada. The company also offers merchant cash advances in the UK.

    Your store must use Shopify Payments or another third-party payment provider. Shopify doesn’t say this directly, but it is implied that business owners using Shopify Payments have a slight advantage.

    Shopify Vague Eligibility

    The company states your business must be “low-risk” but doesn’t define what that means. We can deduce it has to do with being in a reliable industry and having a consistent sales record. But the company doesn’t publish exact requirements.

    You must also maintain a certain sales volume, but Shopify doesn’t define that amount. Shopify Capital makes it clear they regularly monitor seller accounts, though.

    Shopify Capital Business Loan Eligible States

    The business loan product is only available in the following states:

    • Arizona.
    • Idaho.
    • Illinois.
    • Indiana.
    • Iowa.
    • Kansas.
    • Louisiana.
    • Maine.
    • North Carolina.
    • South Carolina.
    • Utah.
    • Washington.
    • Wisconsin.
    • Wyoming.

    For Shopify Capital, You Need to Know That:

    entrepreneur, idea, competence

    Factor rates are competitive with other alternative short-term lenders but more expensive than traditional banks. The trade-off for the higher rate is the quick turnaround time on funding and the simplified process to get approved.

    One way to compare rates is to convert the factor rate into an APR. Let’s continue with the example of borrowing $50,000 at a 1.1 factor rate for a 12-month term.

    Again, the factor rate formula is: $50,000 x 1.1 = $55,000, meaning you’ll pay the equivalent of $5,000 in interest for the loan. That works out to an average monthly payment of $4,583.33 over the 12-month term. If you calculate that as an APR, it works out to 17.98%.

    Obviously, a higher factor rate would mean more interest paid on the principal. If you received a financing offer, ensure you understand the factor rate and how much interest you’ll pay on the loan.

    Shopify Capital’s remittance rate means you must budget for the decrease in sales revenue. The average rate is 10%, but it can go higher.

    Also, the remittance rate is based on your gross sales. If your business processes a lot of refunds and returns, the actual amount you pay is much higher than the rate.

    For example, if you did $10,000 in online sales with a 10% rate, you pay $1,000, leaving you with $9,000 in revenue. But if you refund $2,000, your daily revenue is now down to $7,000.

    How to Apply for Shopify Capital:

    You cannot apply directly for a Shopify Capital business loan or merchant cash advance. Shopify monitors seller accounts and sends an invite to apply when you become eligible.

    Since Shopify has all your business information, you don’t need to fill out an application. While not knowing if you’re eligible or when you’ll become eligible is frustrating, it’s easy and seamless once the process starts with the initial invite.

    Note that receiving an offer does not mean you’re approved. The offers are based on pre-qualification eligibility. You’ll usually receive three offers and select which works best for your business.

    Once you select an offer, Shopify Capital’s underwriting team gets involved. At this point, you might need to provide additional information to verify your business.

    Shopify Capital’s underwriting team might uncover issues that disqualify your business. If this happens, the company might make an alternative lending offer or state you’re ineligible at this time.

    If you’re approved and accept the offer, it generally takes 2-5 business days to disburse the funds.

    How to Access Loan Offers in the Shopify App

    Once you receive your offers, complete the application process by:

    1. From the Shopify Dashboard, go to Settings>Capital.
    2. Select View Funding Offers.
    3. Compare the terms of the three lender offers and select Request under the one you want.
    4. Review the terms for either the Merchant Loan Agreement (merchant cash advance) or Shopify Capital Agreement (business loan).
    5. After reviewing the terms, return to the Review and accept terms dialogue box.
    6. Select Accept terms.

    After submitting Accept terms, it performs the underwriting process and lets you know if you’re approved. You can then accept the offer.

    Shopify Capital Post-Funding:

    Repayment for both the short-term business loan and merchant cash advances comes from the remittance of your daily sales. The payments process automatically.

    There is no deadline to pay off the merchant cash advance. Payments fluctuate with your daily revenue until the total amount is repaid.

    The 12-month term for the business loan means you might need to make payments over the daily remittance if your revenue falls behind the milestones. You must pay one-sixth of the loan every 60 days to remain on track.

    In the previous example of borrowing $50,000 at a 1.1 factor rate, the total amount owed is $55,000. That means the total payments for every 60 days must equal roughly $9,167.

    If the daily remittance over those 60 days doesn’t yield $9,167, you’ll need to make additional payments to stay on track. Additionally, once you repay 25% of the loan, you can pay off the remaining balance in full at any time.

    Making Payments from the Shopify App

    From the Shopify Dashboard:

    1. Go to Settings > Capital.
    2. Select Make Payment.
    3. Choose Custom Amount or Full Remaining Balance.
    4. Select Next Step to review the payment amount.
    5. If everything is correct, select Make Payment.
    6. Shopify will send a confirmation once complete.

    What are the Advantages of Shopify Capital?

    office, startup, business

    The main advantage of Shopify Capital is having a financing platform integrated with your eCommerce platform. Since Shopify Capital is only available to Shopify users, it creates a seamless experience.

    Part of that experience includes the ease of the application process once you receive an offer. The company already has the necessary information, so you don’t need to provide much additional information. When applying for a traditional small business loan, you likely need to provide tax returns, income statements, and more.

    Shopify Capital also offers fairly high borrowing amounts for a short-term small business lender. While the amount you can borrow depends on your business, loans can go up to $1 million. The converse of the high borrowing amount is that loans start at $200, meaning there’s financing available for a wide range of sellers.

    The rates are also reasonable compared to similar lenders. Making repayments and tracking progress is also simple with integrated tools of the eCommerce platform and dashboard.

    Shopify Capital customer support is available 24/7. You can contact them by phone, email, or chat. The company also provides a robust support center to find solutions to common issues.

    What are the Disadvantages of Shopify Capital?

    Shopify Capital is only available to Shopify users; even then, it’s invite-only. Since the company doesn’t publish eligibility criteria, knowing if and when you’ll qualify is even more challenging.

    While the rates are reasonable compared to other lenders, the costs still tend to run high. Small businesses with strong revenue and excellent credit can likely find cheaper financing elsewhere.

    Another disadvantage is the frequent repayment requirements. Since repayment comes from a percentage of your daily sales, your daily profit is limited. In addition, for the Shopify Capital loan, you need to meet the 60-day milestone whether or not your sales fall short.

    We prepared a pro and con list for a quick summary.

    Shopify Capital Pros & Cons:

    pros, and, cons, green thumb up, red thumb down


    • No credit score requirement.
    • Quick turnaround on funding.
    • Large borrowing amounts.
    • Easy repayment tools.
    • Comparatively reasonable rates.
    • Merchant cash advance repayments adjust to your revenue.


    • Only available to Shopify users.
    • Invite-only application process.
    • Undisclosed eligibility criteria.
    • Frequent repayments.

    Apply for business funding through United Capital Source today.

    Shopify Capital Frequently Asked Questions

    Is Shopify Capital Safe?

    faq, ask, often

    Yes, Shopify Capital is a safe and legit lender. The main business, Shopify, is the most popular eCommerce platform in the world.

    Shopify Inc has been accredited by the Better Business Bureau since 2012 and has an A+ rating. The company’s small business lending platform, Shopify Capital, is part of the larger company.

    What Do Shopify Capital Reviews Focus On?

    experience, feedback, survey

    It isn’t easy to find reviews specifically about the lending platform. Most reviews are for the company’s primary product, the eCommerce platform.

    From the sparse reviews out there, the positive takeaways talk about the ease of funding and convenience of a financing program integrated with eCommerce. The platform also makes it easy to track payments and progress on paying off the loan.

    Some customers commented on the ease of the application process since Shopify already has most of the relevant information. Other reviews discussed the inexpensive financing compared to other short-term small business lenders.

    Shopify Capital is upfront about fees and the cost of financing if you read the terms and conditions carefully. Some users commented that there were no hidden fees or extra charges.

    Shopify Capital’s customer service receives mixed reviews. Some customers found the service helpful and informative, whereas others complained the service was too scripted and didn’t address their issues.

    Of the negative reviews, Shopify Capital users found the language around the service confusing. They talked about using “legalese” and feeling uncertain about some aspects of the service.

    Other negative reviews talked about not being able to apply for financing directly. In addition, while the rates are competitive with similar lenders, some users found them too expensive compared to traditional lenders.

    There are some complaints about the rigid repayment schedule. Some customers found the remittance rate too high, while others found it challenging to meet the 60-day milestones for the business loan.

    Are Shopify Capital Loan Amounts Negotiable?

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    No, you cannot negotiate the business loan or merchant cash advance amounts offered. You’ll usually receive three offers with a low, medium, and high amount to choose from. You can accept or decline their offer but can’t negotiate a different amount.

    Does Shopify Capital Impact Credit Scores?

    Based on our research, Shopify Capital won’t affect your credit score. However, we cannot guarantee this is the case. Contact Shopify Capital to ensure it won’t impact your credit.

    How Can I Become Eligible for Shopify Capital?

    Unfortunately, Shopify Capital doesn’t publish minimum thresholds for eligibility. We know that the company sends offers to sellers it deems “low-risk” and meets certain sales numbers, but Shopify Capital doesn’t specify what that means.

    The best advice we can give is to do what you can to create consistency and predictability in your Shopify store. The more stable your eCommerce business is, the more likely you’ll receive a financing offer.

    How Can I Grow My Business with Shopify Capital?

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    Small business owners can use Shopify Capital loans or merchant cash advances to fund a variety of business objectives. The company’s website doesn’t list restrictions on use, but it does describe three business goals you can accomplish with their financing products.

    Hiring Staff

    You can use Shopify Capital financing to bring in new talent and grow your team. Hiring additional employees could help you increase sales figures and revenue.

    Buying Inventory

    When purchasing inventory wholesale, generally speaking, the more you buy at once, the lower the unit price. An influx of capital lets you acquire more inventory, ensuring you can meet customer demand. It’s also good for stocking up on inventory ahead of busy seasons, such as the holidays.


    Establishing and growing your brand is of immense value to any small business. But marketing campaign costs can run high. With Shopify Capital, you can increase your marketing collateral and reach.

    What if Shopify Capital Declines Me?

    x, exit, button

    After you receive the invite to apply for financing, Shopify Capital’s underwriting team still needs to review and finalize approval. During that time, the request may be denied.

    Factors like your daily revenue, cash flow, and other issues could trigger a denial. If you applied after receiving an eligibility offer and were denied, the denial letter should indicate why.

    If Shopify Capital denied your application, or you never received an offer and still want to pursue business financing, there are plenty of other lenders.

    Qualifying for a merchant cash advance is easier than most small business financing. You can also potentially get a business term loan with better rates and longer repayment terms.

    Making Your Decision

    choice, select, decide

    Shopify Capital is best for Shopify eCommerce businesses needing quick funding to grow their operation. Since Shopify Capital program loans and merchant cash advances are only available by invitation, the primary concern is whether the cost of financing is worth it to your business.

    Small businesses that don’t use Shopify can’t qualify. If you’re using Shopify and haven’t received an invite to apply, you might need to grow your business more before receiving an offer. You don’t need to decide on Shopify Capital until they invite you to apply. If and when that happens, carefully review the terms and conditions to understand the total cost of financing.

    Successful businesses with good to excellent credit can probably find cheaper financing. However, the integrated tools with Shopify do simplify the process. Based on the financing available, the ease of application, and user reviews, we rate Shopify Capital at 4 out of 5.

    Disclaimer: The Shopify trademark is owned by Shopify Inc. and its use herein is for reference purposes only and it does not indicate sponsorship or endorsement from Shopify Inc.

    Apply for business funding through United Capital Source today.

    Why Choose United Capital Source?

    Why businesses choose UCS:

    Quick funding options that won’t affect credit
    Access to 75+ lenders with multiple products to choose from
    Financing up to $5 million in as few as 3 days
    1500+ 5 star reviews from happy clients!

    Ready to grow your business? See how much you qualify for:

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        At UCS, we understand the value of your time and want to ensure that your application has a great chance of approval. Please take note of the following details before applying:
        • To be eligible, it’s necessary to have a business bank account with a well-established U.S. bank such as Chase, Wells Fargo, Bank of America, Citibank, or other major banks. Unfortunately, online-based bank accounts like PayPal, Chime, CashApp, etc., are not permitted.
        • When describing your current average monthly sales deposits to your business bank account, please provide accurate information. Our approval process is based on your current business performance, and it’s essential to provide accurate details about your current sales in the first question on the application form. We cannot approve applications based on projected revenues after receiving funding.
        We appreciate your understanding and cooperation in ensuring a smooth and successful application process.
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