Shopify Capital FAQ
You can find the answers here to frequently asked questions about 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 financing, 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 long does it take to receive financing from Shopify Capital?
After you've looked at your financing offers and requested the best one for you, you'll find out whether your request is approved within 2-5 business days. If your request is approved, then you could receive the financing in your bank account as soon as the next business day.
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 financing 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.
Can anyone apply for financing from Shopify Capital?
No. If you're eligible to request financing, then you'll be invited to view your financing options. Only merchants who are offered a merchant cash advance can request financing from Shopify Capital.
How do I know if I'm eligible for financing?
If Shopify Capital has found that you're eligible to request financing, then you'll receive an email and a message in your Shopify admin inviting you to view your financing offers. If you haven't been invited to view your financing options, then you're not currently eligible for financing.
How does Shopify Capital decide whether I'm eligible to request financing?
Currently, the main criteria for eligibility include:
- Your store is located in the United States.
- Your business has a low risk profile.
- Your store has Shopify Payments enabled.
- Your store processes a certain amount of GMV.
Shopify Capital is continuously assessing stores and making offers of financing. If your store isn't eligible now, then it might be in the future.
How long is my offer valid?
Merchant cash advance offers are valid for 30 days.
What happens if my offers expire?
If a financing offer expires, then you will no longer be able to request that financing offer and it will be removed from your Capital page. If you are still eligible for other financing offers, then they will be displayed in place of the expired offer. If you are currently not eligible for any financing offers, then none will be displayed on the Capital page.
How much might Shopify Capital offer to advance me?
Shopify Capital is currently offering advance amounts between $400 and $500,000.
Can I negotiate my financing offers?
No. The terms of your financing options are determined by Shopify Capital's underwriting process, and they can't be negotiated or adjusted.
Can I get additional financing?
Possibly. After receiving financing from Shopify Capital, some merchants are eligible to secure more financing by selling an additional amount of future revenue. If this is the case for you, then you'll be notified by email.
Why was my offer revised after I requested financing?
There are two stages to the Shopify Capital underwriting process. The first stage is automated, during which you were flagged as potentially eligible for certain offers of financing. During the second stage, the Shopify Capital team looked at your request and found that you aren't eligible for the offers that were automatically shown to you. They revised the offers available for you to choose from to tailor the offer to your business needs.
Why was my request for financing refused?
There are two stages to the Shopify Capital underwriting process. The first stage is automated, during which you were flagged as potentially eligible for certain offers of financing. During the second stage, the Shopify Capital team looked at your request and found that you aren't eligible for financing at this time. If this changes, then you'll again be invited to view your financing offers.