Shopify Capital Lending Review for 2020

What Is Shopify Capital?

Shopify Capital is a business financing program through which Shopify sellers can get fast access to business loans and merchant cash advances. The funding is available by invitation only for sellers who have an established history of Shopify sales. 

Shopify Capital is quite affordable compared to most alternative lenders. While it’s not as cost-effective as other traditional lenders, if you need a quick shot of capital for your business, Shopify Capital could be a good option.

More than 1 million ecommerce businesses use Shopify, and the platform reaches over 300 million customers. There’s a vast diversity of small businesses on the platform, and Shopify Capital can help merchants grow their businesses to the next level. Read on to learn more about how Shopify Capital works, how much it costs, and the pros and cons.

Pros and Cons

  • Quick, easy application and funding process
  • Provides an alternative to traditional financing for Shopify merchants
  • Wide range of funding amounts available 
  • Less expensive than other short-term loans and merchant cash advances
  • Repayment keeps pace with your level of daily sales 
  • Easily monitor repayment progress in your Shopify admin dashboard
  • Only available to Shopify sellers
  • Eligibility criteria not clear
  • Daily debits from your Shopify sales revenue
  • You must sign a personal guarantee

Shopify Capital Business Loans

There are two Shopify Capital funding options—Shopify Capital business loans and Shopify Capital merchant cash advances. The two products have some notable differences around repayments but are similar in terms of funding amounts and cost.

Shopify Capital Business Loan

  • Maximum loan amount

    $1 million

  • Loan terms

    12 months

  • Interest rates


Shopify Capital loans are lump-sum loans that come with a borrowing fee. You repay the loan and fee in increments for over 12 months. Funds are deposited into your business bank account, and Shopify deducts a small fixed percentage of your daily sales—called the repayment rate—until the loan and fee are fully repaid. To ensure that you pay back the total amount owed within 12 months, there are payment “milestones” that you have to meet along the way. Every 60 days, you must pay back at least one-sixth of the total amount owed. 

For example, let’s say Shopify offers you a $10,000 loan with a borrowing fee of $1,000 and a repayment rate of 10%. The total owed is $11,000 (the loan amount plus the fee). Every day that you have Shopify sales, Shopify will deduct 10% of your sales until the full $11,000 is repaid. To ensure that you pay back the full $11,000 within 12 months, you’ll have to pay at least $1,833—one-sixth of that total—every 60 days. If, at the end of a 60-day period, you’re not able to meet your payment milestones, the shortfall is automatically debited from your bank account.

Shopify Capital Merchant Cash Advances

  • Max amount

    $1 million

  • Terms

    Until agreed amount of future sales is paid off

  • Factor rates

    Start at 1.1

Shopify Capital merchant cash advances are lump sum amounts between $200 and $1 million that you receive in exchange for repaying a set amount of your future sales revenue to Shopify. You’ll have to repay the advance plus a borrowing fee. The advance gets deposited into your business bank account, and Shopify deducts a small fixed percentage of your daily sales until the advance and fee have been collected.

In contrast to the business loan, there are no payment milestones and no fixed repayment period. Instead, Shopify keeps deducting a fixed percentage of your daily sales until the advance and fee are fully paid back. This makes the cash advance a bit more flexible than the business loan, which has to be fully repaid within 12 months.

To take an example, let’s say Shopify offers you a $10,000 merchant cash advance with a borrowing fee of $1,300 and a repayment rate of 10%. The total amount that you have to repay Shopify is $11,300 (the advance plus the fee). Every day that you have Shopify sales, Shopify will deduct 10% of your sales until the full $11,300 is repaid. On days that you have no Shopify sales, nothing will be deducted. This gives you some peace of mind knowing that you’ll repay the advance only as your business allows.

Shopify Capital Rates, Fees, and Terms

Shopify Capital does not charge a simple interest rate. Based on the examples provided on their website, they charge a factor rate of 1.1 or 1.13. Repayment rates average 10%. Your factor rate and repayment rate will depend on your Shopify sales history and risk profile. 

In order to understand the cost of Shopify Capital compared to other types of business loans, it helps to calculate the annual percentage rate (APR). The APR can be used to convert the cost of Shopify Capital into an annualized interest rate, taking the borrowing fee and repayment rate into account. You can calculate the APR on your Shopify Capital loan or advance by using Fundera’s short-term loan calculator or merchant cash advance calculator, depending on which product you’re considering. 

To take one example, the APR on a $10,000 Shopify Capital loan with a 1.1 factor rate is 19.61%. The APR on a $10,000 Shopify Capital advance with a 1.1 factor rate is 42.63%, assuming you make approximately $20,000 in monthly Shopify sales and are assessed a repayment rate of 10%. Although Shopify Capital is much more expensive than a bank loan, the debt is also paid back much more quickly.

Shopify Capital Borrower Eligibility

Shopify will let you know if you’re eligible for a Shopify Capital business loan or merchant cash advance. Although there are no rigid requirements, here are a few basic details you should know.

Minimum Requirements

  • Your store must be located in the U.S. or Canada (Shopify Capital loans are only available in select U.S. states, whereas Shopify Capital advances are located throughout the U.S. and Canada).
  • Your business is assessed to be low risk. 
  • Your store has enabled Shopify Payments or uses another online payment processor.
  • Your store must process a certain amount of sales.

Shopify doesn’t explain what exactly is meant by a “low-risk” business profile, but it likely is related to things like your industry and history of sales. For example, a business with a steadily growing pattern of sales is more likely to qualify for funding than a business with seasonal sales revenue. Shopify also doesn’t reveal the volume of sales you must process to qualify for funding, but they do make it clear that they regularly monitor seller accounts. This means that even if you don’t qualify for Shopify Capital now, you might in the future.


Shopify loans are only available for businesses operating in the following states: 

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

What You Need to Apply

  • A seller’s account with Shopify
  • A business bank account
  • Additional business documents

How to Get a Loan With Shopify Capital

Keep in mind that you don’t apply for Shopify Capital. Instead, Shopify will alert you via email if you’re found to be eligible based on the parameters shown above. With that said, if you’re interested in learning more about Shopify Capital’s application process, read on.

Application and Underwriting Process

If Shopify Capital deems you eligible for a business loan, you’ll be able to view your pre-qualified funding offers in your Shopify admin dashboard. These offers are usually valid for 30 days. If you do not accept an offer within this time frame, your pre-qualified loan may be revoked. At this point, keep in mind that the offers are just that; you’re not yet guaranteed to receive funding. If you choose a funding offer, Shopify generally takes two to five business days to give the final stamp of approval. Once you’re approved, you could see the funds in your bank account as soon as the next business day.

Post-Funding Process

Once you’ve received your business loan from Shopify, you can then track and manage your payments on your Shopify admin dashboard. You can review your payment history, check the total remaining balance owed, and keep tabs on your daily sales revenue.

Repayment Process

If you have a merchant cash advance, when you’ve remitted over 25% of your total to remit, you have the option to pay the remaining balance in a single lump sum. The payment is debited from the same business bank account that’s tied to your Shopify store.

If you have a business loan, you can choose to pay at least $20 or more to pay down your loan, or you can pay the full remaining balance in one lump sum.

Shopify Capital Customer Service

Shopify’s customer service is available through email, live chat, or phone. They also have an extensive help center with answers to most sellers and buyer questions. 

You email their support team through the contact form here or contact them through their live chat here.

Shopify Capital Customer Reviews

Online reviews for Shopify Capital can be hard to find. Most of the reviews found on Trustpilot or the Better Business Bureau are from customers rather than sellers who have used Shopify Capital. That said, you can find positive reviews regarding the convenience of the application process, as sellers don’t have to undergo the same process as they would if applying for a loan at a bank. 

Positive reviewers also liked the easy payment tracking through the Shopify dashboard. 

On the other hand, some have reported that Shopify Capital’s repayment system can negatively affect cash flow. This is especially true for businesses that have a high daily return rate. Because you still have to pay a daily percentage on those sales, negative reviewers note that you can potentially be paying a very high percentage of your receivables. 


Overall, reviews of Shopify are generally mixed, depending on where you look.

Top Alternatives to Shopify Capital

The biggest advantages of Shopify Capital are the speed and simplicity of the application process. If that’s what you’re after, here are additional funding platforms that are worth considering:

Shopify Capital Lending

Fundera Score





Funding Circle

Fundera Score


Fundera Score


Fundera Score


Fundera Score


Products Offered

Term loan; lines of credit

Products Offered

Lines of credit

Products Offered

Working capital loans

Products Offered

Term loans

Interest rates

Starting at 35.1%; 31%

Interest rates

1.5% to 10% per month

Interest rates

Factor rates as low as 1.15

Interest rates

Starting at 4.99%

Minimum credit score required


Minimum credit score required

No minimum

Minimum credit score required


Minimum credit score required

Apply NowRead Full ReviewApply NowRead Full ReviewRead Full ReviewApply NowRead Full Review
Scroll to See Options

Frequently Asked Questions

Is Shopify Capital in Fundera's Network?

Shopify Capital is not in Fundera’s Lender Network. The Fundera team carefully vets all of the lenders in our network and have determined that Shopify Capital either doesn’t have the technology to work with Fundera or does not offer a financing product that competes with the other lenders in its product class. We suggest considering another lender in this product class.

See if you qualify for similar products in Fundera’s Lender Network.

Senior Contributing Writer at Fundera

Priyanka Prakash, JD

Priyanka Prakash is a senior contributing writer at Fundera.

Priyanka specializes in small business finance, credit, law, and insurance, helping businesses owners navigate complicated concepts and decisions. Since earning her law degree from the University of Washington, Priyanka has spent half a decade writing on small business financial and legal concerns. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.

Read Full Author Bio