Shopify Capital merchant cash advance
A merchant cash advance is a lump sum of money that you can apply to receive for a fixed fee. You pay Shopify Capital a percentage of your daily sales until the total amount is paid.
For example, Shopify Capital might advance you $5,000 to for $5,650 paid from your store's future sales, with a remittance rate of 10%. The $5,000 amount received is transferred to your business bank account, and Shopify Capital receives 10% of your store's gross daily sales until the full $5,650 total to remit has been remitted. After you remit over 25% of your total to remit, then you have the option to remit the remaining balance in a single lump sum.
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.
Shopify Capital offers funding amounts between $200 to $2,000,000 USD or $200 to $2,000,000 CAD. The total to remit and remittance rate depend on your risk profile.
Request a merchant cash advance
You can view your funding offers and request a merchant cash advance directly from the Capital page of your Shopify admin.
From your Shopify admin, go to Settings > Capital.
Find the eligibility message from Shopify Capital, and then click View funding offers.
On the Capital page, there are different funding options. Compare the terms of the funding options, and click Request beneath the one that you want.
The terms of each option will 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.
In the Review and accept terms dialog, carefully review the Terms and conditions section, and then click Shopify Capital Agreement to open it in another browser tab.
Carefully review the terms of the Shopify Capital Agreement and the Pre-authorized debit agreement if you are in Canada. If you agree with the terms, then go back to the Review and accept terms dialog, and click Accept terms.
Your request will be reviewed by Shopify Capital, and you'll hear whether you've been approved within 2-5 business days. If you're approved, then your merchant cash advance will be delivered to your business bank account.
Two days after you've received the merchant cash advance, Shopify Capital will begin debiting the daily remittance from your business bank account based on your sales revenue each day.
Keep track of your merchant cash advance remittances
After receiving your merchant cash advance, you can track the remaining balance of your total to pay back, or remit, in your Shopify admin by going to Settings > Capital.
From the Capital page, you can view:
- the remaining balance.
- the amount that you've paid, what percentage of the total is paid, and 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 the Amount column.
Remit the remaining balance
When you've remitted over 25% of your total to remit, then you have the option to remit the remaining balance in a single lump sum. The payment is debited from the same business bank account that's tied to your Shopify account.
From your Shopify admin, go to Settings > Capital.
Click Remit balance.
At the prompt, review the balance to be remitted. If you're sure that you want to remit the full amount of the remaining balance, then check the authorization box and click Remit balance.
It can take up to 3 business days to process the lump sum remittance. All regular remittances are paused during the processing period.
You will receive a confirmation email when your lump sum remittance is complete.
What's included in the remittance?
To calculate the amount that will be remitted to Shopify Capital each day, the remittance rate is applied to your store's daily sales revenue.
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 are not included in your store's daily sales revenue are test orders that were placed when Shopify Payments was in test mode. If test mode was not enabled when an order was placed, then the order is included in your store's sales revenue when the day's remittance is calculated.
- What is a merchant cash advance?
- How does a merchant cash advance work?
- How does remittance work?
- How is remittance calculated?
- What's the interest rate?
- Is there a deadline to deliver the agreed amount of future sales revenue to Shopify Capital?
What is a merchant cash advance?
A merchant cash advance gives you a lump sum of capital for an agreed amount of your future sales revenue. For example, you might receive a lump sum of $10,000 in exchange for selling to Shopify Capital $11,300 worth of your future sales revenue.
How does a merchant cash advance work?
If you're eligible for funding, then Shopify Capital will offer you a choice of merchant cash advances of different amounts, and with different totals to remit and remittance rates. You request the advance amount that's right for you, and if you’re approved, then Shopify Capital deposits the funds in your bank account.
As you make sales, you’ll automatically remit to Shopify Capital a fixed percentage (the remittance rate) of your daily sales until Shopify Capital receives the agreed amount of your future sales revenue (the total to remit).
How does remittance work?
For every day that you make sales, a fixed percentage (the remittance rate) is applied to the gross dollar amount of your sales to calculate your remittance. On days when you sell a lot, your remittance will be bigger, and on days when you sell less, your remittance will be smaller. You’ll continue to make remittances until Shopify Capital has received the full agreed amount of your future sales revenue (the total to remit). Each remittance is automatically debited from your bank account and remitted to Shopify.
When you've remitted over 25% of your total to remit, then you have the option to remit the remaining balance in a single lump sum.
This table shows an example of five days of remittances for a merchant who has sold $15,000 worth of their future sales revenue to Shopify Capital, with a remittance rate of 10%:
|Day||Daily revenue||Shopify Capital's share||Balance|
How is remittance calculated?
Each day that you make sales, a fixed percentage is applied to the day's gross sales revenue to calculate the day's remittance. The percentage is called the remittance rate, which you agree to when you select your funding offer.
For the purpose of calculating remittance, your gross sales revenue includes every order that's marked as paid each day, regardless of the source of the order, how payment was processed, or whether the order was later refunded or canceled. The only orders that are excluded are test orders placed while Shopify Payments is in test mode.
What's the interest rate?
There is no interest rate because a merchant cash advance is not a loan. You sell an agreed amount of your future sales revenue to Shopify Capital, and then each day a fixed percentage (the remittance rate) of your sales revenue will be remitted to Shopify Capital until we've received the full amount of sold sales revenue (the total to remit).
Is there a deadline to deliver the agreed amount of future sales revenue to Shopify Capital?
No. There is no timeframe or deadline for delivering the agreed amount of future sales revenue (the total to remit) to Shopify Capital. You continue to make remittances for as long as you have revenues until Shopify Capital has received the total to remit, and each remittance amount is based on how much you sell each day.