Shopify Capital merchant cash advance for merchants in the United Kingdom
In the United Kingdom, Shopify Capital offers merchant cash advances. A merchant cash advance is a purchase of your future sales, also known as receivables. Shopify provides merchant cash advances in the United Kingdom through our partner YouLend under the receivables purchase agreement. If your application for funding is accepted, then you receive a lump sum of money, known as the purchase price, for a fixed fee, known as the purchase percentage. Under the receivables purchase agreement, you pay a percentage of your daily sales, known as the purchase percentage, until the total amount, known as the termination amount, is paid. The termination amount and the remittance rate depend on your risk profile.
For example, Shopify Capital through its partner, YouLend might purchase 5,000 GBP of purchased receivables for 5,650 GBP paid from your store's daily sales. You receive 5,000 GBP into your business bank account, and Shopify Capital receives 10% of your store's gross daily sales until the total 5,650 GBP is paid. You have the option to remit all or some of remaining balance in a single lump sum. This is considered a repurchase of the receivables under your agreement.
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.
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Request a merchant cash advance
If you're eligible to apply for a merchant cash advance (known as a purchase of receivables in the United Kingdom), then you can view your funding options and request a merchant cash advance directly on the Capital page of your Shopify admin. Funding isn’t guaranteed, and an offer to apply for funding might expire at any time.
You can choose from three funding options. The terms of each option include the amount received, the total to remit that Shopify Capital will buy, and the remittance rate that will be deducted from your daily sales and remitted to Shopify Capital.
After you apply for a merchant cash advance, your request is reviewed within 1-3 business days, but it might take longer in some cases. If your request is approved, then your merchant cash advance is transferred to your business bank account.
- From your Shopify admin, go to Settings > Capital, and then click Offers.
- Review the terms of the available funding options, and then click Apply now beneath the option that you want to apply to.
- Verify your identity and business details for Shopify Capital.
- In the Review and accept terms dialog, click Receivables Purchase Agreement, and then review the terms of the agreement carefully before submitting your application.
- Select Change my payments provider to Shopify Payments, to change your payment provider to Shopify Payments.
- Click Accept terms. You might be asked to verify your details for Shopify Capital, even if you have previously received funding through Shopify Capital.
After you receive the merchant cash advance, the daily remittance based on your store's daily sales begins within two business days.
Keeping track of your merchant cash advance remittances
After you receive your merchant cash advance, you can track the remaining balance of your total to pay back (the termination amount), or remit, in your Shopify admin by going to Settings > Capital.
From the Capital page, you can view the following remittance information:
- the remaining balance
- the amount that you've paid
- the percentage of the total that is paid
- the transfer history
You can view each day's sales revenue in the Total sales column of the transfer history section. You can view how much is paid to Shopify Capital in the Amount column.
Download your balance letter
You can download a balance letter from the Capital page of your Shopify admin. You can use the balance letter to show your bank that you no longer have any financial obligation or what your current balance is.
- From your Shopify admin, go to Settings > Capital.
- Click View all transactions.
- Click Export, and then click Balance letter.
- Save the balance letter to your device.
Remit the remaining balance
You have the option to remit any amount over 1 GBP against your advance, or the full remaining balance in one lump sum. The payment is debited from the same business bank account that's tied to your Shopify account. The cost of this financing, known as the termination amount, isn't reduced when you pay your entire balance, and payment doesn't guarantee eligibility for additional financing.
- From your Shopify admin, go to Settings > Capital.
- Click Make a payment.
- Choose the amount that you want to pay:
- To make a manual remittance, enter the amount in the Custom amount field.
- To remit the full amount, click Full remaining balance.
- Click Next step and review the amount to be remitted.
- If you're sure that you want to continue with the remittance, then check the authorization box and click Make a payment.
It might take up to three business days to process the lump sum remittance. All regular remittances will continue during the processing period.
You receive a confirmation email when your lump sum remittance is complete.
Calculating merchant cash advance remittance
For every day that you make sales, a fixed percentage (the remittance rate also known as the purchased percentage in the Receivables Purchase Agreement) is applied to the gross amount of your sales to calculate your remittance (the amount payable under the Receivables Purchase Agreement). On days when your sales are high, your remittance is bigger, and on days when your sales are low, your remittance is smaller. You continue to make remittances until Shopify Capital has received the full agreed amount of your future sales revenue (the termination amount). Each remittance is automatically debited from your bank account and remitted to Shopify. If there are no sales on a particular day, then there will be no remittance for that day.
For the purpose of calculating remittance, your store's daily sales revenue includes every order that was marked as paid that day, regardless of the source of the order, how payment was processed, or whether the order was later refunded or canceled. When calculating remittance, the only orders that aren't included in your store's daily sales revenue are test orders that are placed when Shopify Payments is in test mode. If test mode isn't activated when an order is placed, then the order is included in your store's sales revenue when the day's remittance is calculated.
This table shows an example of five days of remittances for a merchant who has sold 15,000 GBP worth of their future sales revenue to Shopify Capital, with a remittance rate of 10%:
|Shopify Capital's share
Requesting another merchant cash advance
After you receive a merchant cash advance, you might want to apply for another merchant cash advance for additional financial support.
If you're eligible to apply for another merchant cash advance and you've repaid at least 65% of your active merchant cash advance, then new funding options are displayed on the Capital page in your Shopify admin.
If you apply and get approved for a second merchant cash advance, then the funds are deposited to your bank account within 2-5 business days. The repayment for your second merchant cash advance begins only after you fully repay your first merchant cash advance.