Shopify Capital merchant cash advance review
Your business may be able to take advantage of a merchant cash advance.
Get access to funds ranging from $200 to $2,000,000 in exchange for a portion of your future revenues.
How much will this cash advance cost me?
Shopify offers a merchant cash advance between $200 to $2,000,000. A merchant cash advance is a lump sum (called the amount received) that you receive from Shopify Capital in return for selling to Shopify Capital a set amount of your future sales revenue (called the total to remit). The amount received is deposited into your business bank account, and then a percentage of your daily sales is remitted to Shopify Capital until the total to remit is completely paid.
There is no deadline for remitting the total to Shopify Capital. The daily remittance amount is determined by your store’s daily sales, because the remittance rate is a percentage of your store’s daily sales. The remittance amount is automatically debited from your business bank account.
How it works
Shopify Capital gives this example: Shopify Capital might advance you $5,000 to purchase $5,650 of your future revenue, with a remittance rate of 10%. The $5,000 amount received would be delivered to your business bank account, and Shopify Capital would receive 10% of your daily sales revenue until the full $5,650 total to remit has been remitted. When you’ve remitted over 25% of your total to remit, you have the option to remit the remaining balance in a single lump sum.
What do I need to qualify?
Shopify doesn’t allow its users to apply directly for funding. However, it does list a few components of what it looks for in a business before it offers a loan:
- Low-risk profile
- Store uses Shopify Payments or third-party payment provider
- Regularly processes high volumes of sales
What information do I need to apply?
Shopify doesn’t list the information you need to have on hand when you apply. But because Shopify reviews your business before it offers funding, it may only need to confirm your business’s revenue, profit and daily sales.
Check with Shopify to confirm the information your business will need to submit.
What other types of financing does Shopify offer?
Shopify Capital offers business loans to eligible businesses throughout the US only, not Canada.
Pros and cons
Consider these factors to determine if Shopify is the right — or wrong — choice for your business.
- Wide range of cash advance amounts from $200 to $2,000,000
- No credit check
- Minimal paperwork
- Daily remittance deducted from sales
- Loans only available to merchants in the US
Is Shopify legit?
Yes, Shopify is a legit platform that offers short-term loans and merchant cash advances to its users. Its website is encrypted to protect your information from theft and misuse.
Does Shopify get good customer reviews?
None of the recent reviews on Shopify’s Trustpilot or Better Business Bureau pages cover its loan options. But there are multiple negative complaints about difficulty communicating with customer service and problems processing payments. With this history, it may be difficult to get help with your loan if you run into any problems.
How do I apply?
If you receive a funding offer from Shopify, you can request funding by following these steps:
- Click Request for the amount your business needs.
- Enter details about your business and bank account where needed.
- Review your financing offer.
- Click Apply for offer to submit your request.
Funding offers are typically good for up to 30 days, but Shopify may change or cancel your funding offer at any time based on your business’s sales and metrics. If you choose not to take a funding offer and it expires, you won’t be able to request a loan or merchant cash advance — instead, Shopify will notify you if your business becomes eligible for funding again.
What happens after I apply?
Shopify processes requests within two to five business days. If approved, your business will receive its loan funds as soon as the next business day.
How do repayments work with Shopify?
Repayments are deducted from your business bank account daily — but the amount that Shopify collects is based entirely on your sales for that day. For example, if your remittance rate is 10% and your business makes $300 from sales, your daily payment will be $30. This is deducted from your remaining loan balance.
Because Shopify splits its loans into six 60-day milestones, you will need to repay a sixth of your loan every two months. If your business’s daily sales don’t meet the minimum payback amount, Shopify will automatically debit the remaining amount from your account.
You can choose to repay your loan early, and there are no prepayment penalties. Shopify allows you to make an extra payment of $20 or more whenever you need to. And if you’re able, you can repay the loan in a single lump sum on the payment page in the settings section of your Shopify admin page.
If you don’t work with Shopify or haven’t been preapproved, compare more options by reading our guide to business loans.