Shopify Capital Loan Review 2023: Pros and Cons

Shopify Capital Loan Review: Pros and Cons

Shopify Capital is Shopify’s lending service and helps small business owners apply for funding online so they can use that money to expand their ecommerce business. Plus, it makes repayment easy by taking a percentage of their online sales without charging compounding interest.

Shopify Capital Lending Review

In order to decide if Shopify Capital Lending is right for you, it’s important to understand how it works. 

We reviewed the application process, loan repayment process, fees, eligibility, and more so you can make an informed decision for your business’s funding needs. 

What Is Shopify Capital?

Shopify Capital is a financing option for companies that use Shopify for their ecommerce services. It primarily offers financing through business loans and merchant cash advances.

Shopify Capital doesn’t offer loans to the general public, unlike many other lenders. You must use Shopify’s ecommerce tools to apply since you automatically repay the loan by giving Shopify a percentage of your online sales.

Once you receive funding from Shopify, you can use the money for anything you want, whether scaling your online business or boosting your physical presence.

Pros and Cons

Before you sign up for Shopify Capital, consider these pros and cons.


  • Borrow up to $2 million: Shopify Capital offers large loans. While you need high sales levels to qualify for more significant amounts, this level of funding can offer a lot of flexibility.

  • Get funds in days: Shopify Capital funds loans in as little as two business days after approval rather than weeks, like some other lenders.

  • Automatic repayment: You don’t have to worry about another monthly bill or potentially missing your payments. Shopify will take a percentage of your online sales and apply that amount toward your loan balance.

  • Don’t lose equity: Shopify’s loans don’t involve selling any equity to Shopify.

  • No personal credit checks: Your personal credit score won’t impact your approval odds.

  • No compounding interest: Shopify Capital uses factor rates rather than compounding interest, making it easier to predict your final loan cost.


  • Limited eligibility: You can only apply for a loan if you use Shopify for your ecommerce site and Shopify invites you to request funding.

  • Cash flow impact: Since you pay the loan back through a portion of your sales, the loan impacts your cash flow by reducing how much of each sale you keep.

  • Limited loan types: Shopify only offers business loans and merchant cash advances. If you want a different kind of financing, you’ll have to look elsewhere.

Shopify Capital Business Loans

Business loans are one of the two types of financing that Shopify Capital offers.

The platform offers business loans with a fixed borrowing cost. Essentially, this is a fixed fee you pay for the loan. This fee contrasts the typical loan protocol, which involves interest that accrues on your principal balance.

Requesting a Shopify Capital Business loan through the Capital page in your Shopify Admin panel is possible. You can view all the available funding offers and select the best option for you.

Payments can be made in any amount over $20 up to the total amount you owe.

Shopify Capital Merchant Cash Advances

The other type of loan that Shopify offers is a merchant cash advance, which involves a lump sum of cash received upfront in exchange for a fixed fee. They are popular for financing inventory purchases or new product lines. You repay the loan by letting Shopify take a percentage of your future sales until the balance is paid in full.

For example, you might get a $5,000 cash advance with a 12% fee, making your initial balance $5,600. From then on, Shopify takes 10% of your sales until you’ve repaid the $5,600 balance.

These cash advances are flexible because there’s no deadline for full repayment, and paying back the loan happens automatically. Like Shopify’s business loans, you can view funding offers in your Shopify Admin panel.

Shopify Capital Rates, Fees, and Terms

One of the most important things to consider when borrowing money for your business is how much the loan will cost.

Shopify Capital’s loans are slightly different from many other types of business loans. Rather than applying an interest rate to your loan, it uses a fixed borrowing cost based on the size of your loan, and the amount you owe isn’t influenced by how long it takes you to pay the money back.

Unfortunately, Shopify doesn’t disclose a set rate and fee structure. It does offer some illustrative examples that use a factor rate of 1.13 and a remittance rate of 10%.

This means that the total amount you must repay is 13% more than you borrowed, and you repay the loan by giving Shopify 10% of your sales. So, if you borrow $100,000, you have to repay $113,000. If your daily sales total $5,000, you’ll give Shopify $500 daily.

Actual terms, fees, and remittance rates will vary depending on the risk profile of your ecommerce business.

Shopify Capital Borrower Eligibility

One of the drawbacks of Shopify Capital is its somewhat unclear eligibility requirements. The company states that Shopify Capital is available to “select merchants in the United States, Canada, United Kingdom, and Australia,” with eligibility determined by its underwriting model that uses machine learning.

The basic eligibility requirements are to:

  • Sell on Shopify for at least 90 days.

  • Comply with the Terms of Service and Acceptable Use Policy.

  • Demonstrate consistent sales.

Shopify will email eligible companies and place a message on your Shopify Admin page to notify you of funding options.

What You Need to Apply

A primary benefit of Shopify Capital is that Shopify has almost all of the information it needs, even before you apply for a loan. Shopify knows about your company, your sales numbers, and all sorts of other details.

You’ll see an invitation on your Admin page if you're eligible for a loan. You may have to verify a few details, but the application is otherwise easy.

How to Get a Loan With Shopify Capital

The first step to getting a loan with Shopify Capital is to use Shopify for your ecommerce site. Once you’ve done that, there isn’t much to do but wait. If you have consistent sales, Shopify may eventually offer a loan.

Given that you can’t apply for a loan until Shopify decides to invite you, the best way to get a loan is to have a strong ecommerce site with high sales levels.

Application and Underwriting Process

The application process for Shopify Capital is relatively straightforward. If you get an invite from Shopify, follow this process:

  1. Sign in to your Shopify Admin panel and go to the Capital tab.

  2. Check the funding offers and compare your options.

  3. Select the one that you like and click Request.

  4. Verify any details Shopify asks for.

  5. Agree to the Merchant Loan Agreement and click Submit application.

Shopify already has most of the information it needs to underwrite your loan and only invites companies it expects to approve. You’ll get a final decision in one to three days, while funding takes up to two additional days.

Post-Funding Process

After you’ve received your funds, you can begin using the money, tracking your loan repayments through the same Shopify Capital tab on your Admin panel.

Repayment Process

The repayment process for Shopify Capital is simple. The company uses factor rates rather than interest, meaning your balance won’t grow over time. Instead, Shopify takes a percentage of your online sales each day and applies that amount toward your loan balance until the loan is paid in full.

For example, if the remittance rate for your loan is 10% and you sell $3,000 on your site, Shopify takes $300 and applies it to your balance. You can also choose to make additional payments toward your loan.

Some loan terms may include “milestones.” These are 60-day periods in which Shopify requires a specified portion of your balance to be paid back. If the remittance from your sales isn’t enough to cover the minimum payback amount by the end of the milestone period, Shopify will automatically take out the difference from your account. 

For example, let’s say you must pay back $1,000 for every milestone, and your remittance rate is 10%. If you make $7,000 in sales by the end of that 60-day milestone period, you will have paid $700 back on the loan, meaning that Shopify will take an additional $300 out of your account to reach the total $1,000 owed. 

Shopify Capital Customer Service

If you have questions about Shopify Capital or encounter problems, you’ll want to contact Shopify customer service. The platform offers personalized customer support options, live chat, and email support.

Shopify Capital Customer Reviews

Customer reviews for Shopify Capital tend to be positive. The company has an A+ rating from the Better Business Bureau, and many reviewers mention the ease of repayment and reasonable costs as a benefit of its lending service.

Top Alternatives to Shopify Capital

Consider these alternatives if you’re in the market for a business loan but aren’t sure Shopify Capital is right for you.

American Express

American Express offers credit cards and business loans as low as $3,500, making it a strong lending option for new companies that want to fund their initial stages of growth.

Another benefit of working with American Express is that you don’t have to use any of its other services to get a loan. 


Bluevine is an online lender that offers a flexible line of credit of up to $250,000. The online application is easy, and you can receive a decision in just five minutes. You can then draw funds from your line of credit whenever you’d like, with six or twelve-month repayment terms.

Eligibility requirements make up the primary drawback. Companies seeking funding must be at least two years old, have $40,000 in revenue, and have a 625+ FICO score to be eligible, eliminating Bluevine as an option for new businesses.

Final Word

If you sell on Shopify, Shopify Capital can be a strong source of financing. Take a look at its offers, but don’t be afraid to look around and consider loans from other companies.

More Articles
Newsletter Card


Stay up to date on the latest news, articles, and announcements from It’s easy and it’s free.