How Does Shopify Capital Funding Work for a Small Business​?

Shopify Capital gives eligible Shopify merchants a pre-approved funding offer inside their Shopify admin. It gives eligible Shopify merchants pre-approved funding, based on factors like their sales history. If Shopify approves, you receive a lump sum in your business bank account, and you repay automatically, typically as a fixed percentage of your daily sales.

Have you ever felt like your Shopify store is growing, but you need more funding for sustainable growth?

That’s where Shopify Capital can help. If you’re eligible, Shopify shows funding offers right inside your admin.

In this article, you’ll learn how does Shopify Capital funding work for a small business.

What is Shopify Capital?

Shopify Capital is Shopify’s built-in funding program for eligible store owners. It gives you access to financing inside your Shopify admin (under Finance). This helps you invest in things like inventory, marketing, hiring, or opening a retail space, without going to a traditional bank first. 

Shopify decides eligibility and shows offers based on signals like your store’s location and your history and activity on Shopify.

Let’s have a few quick FAQs before we check the eligibility criteria.

How much funding can I get through Capital?

Shopify Capital has a maximum cap, and Shopify only shows you the amount you’re eligible for inside your Shopify admin > Finance. In general, Shopify Markets Capital offers up to $2M (or local-currency equivalent), but your actual offer can be much lower or higher depending on your store’s sales history. 

How should I repay the loan from Capital?

If you received a Shopify Capital loan, repayment can still be based on a percentage of daily sales, and Shopify says loans must be paid off within a maximum of 18 months. This should include a minimum of two payment checkpoints within the first two 6-month periods.

You can also make an extra payment in Admin in many regions: go to Finance > Capital > Make a payment, then choose a custom amount or pay the full remaining balance.

What happens if I cannot repay my loan?

If you can’t pay back Shopify Capital, what happens depends on the product you took. Because repayment is usually tied to your sales, Shopify generally takes less (or nothing) on very low or zero-sales days, but with Shopify Capital loans, you still have to meet minimum repayment progress and pay the loan within the required term.

Falling behind can put you in default under the loan agreement. In default situations, Shopify’s agreements can allow them to demand the remaining balance and use other remedies outlined in your contract.

What is the Shopify Capital eligibility criteria?

• Your store is active long enough: You must be on an active Shopify plan, and your store must be operating for at least 3 months (or your first sale must be more than 3 months ago).

• You’re the store owner: Shopify requires you to be the store owner to apply.

• Your business type is supported: Trusts and partnerships aren’t supported (applications tied to these won’t be accepted).

• Your sales + fulfillment look good: Shopify mainly weighs sales performance, including sales volume, how often you sell, total orders, and the number of orders that ship successfully.
• Customers aren’t raising too many issues: They consider customer engagement and also your rate of returns, chargebacks, and payment disputes.
• You follow Shopify’s rules: Stores that might violate Shopify’s Terms of Service or other Shopify agreements (including Shopify Payments and Shopify Credit) can be ineligible.
• Your payment history with Shopify is clean: Things like failed debits, missed payments, or problems repaying other Shopify financial products can hurt eligibility.

• Your payment setup matters: Shopify Capital can be available if you use Shopify Payments or approved third-party providers.
• You don’t sell prohibited products/services: If your store sells prohibited items (Shopify gives examples like cannabis and drug paraphernalia, even if legal where you are), you can be ineligible.
• No reserves or Exchange listings: Having a Shopify Payments reserve can affect eligibility, and stores listed on or recently sold on Shopify Exchange are ineligible.
• Extra rule for loans: If you’re applying for a loan, the Shopify Payments account representative must personally live in the same country as the business and have a residential address there.
• Location, currency, and bank account must match: Your business must be in one of the supported countries listed in the article. Your store currency must match the required currency for that country. Your bank account must be in the same country as your business.

Here’s a great case study of The Public Pet, which increased its revenue by 50% using Capital. 

In which countries is Capital funding available?

How does Shopify Capital funding work for a small business​?

• Check if you have an offer: In your Shopify admin, go to Finance. If you are eligible, Shopify shows you funding options there (offers can change or expire, and an offer does not guarantee funding).
• Review the details: Pick an offer and read the key terms like the funding amount, the total amount you will repay, and how repayments work (loan vs merchant cash advance).
• Apply inside Shopify: The application happens inside your admin with minimal paperwork (Shopify says there are no credit checks or guarantors for Capital applications).
• Get the payout: If approved, Shopify sends the funds to your business bank account linked to Shopify Payments.
• Repay automatically from sales: Repayment is taken as a percentage of your daily sales. The amount taken changes with your sales.
• Track it in Finance: You can monitor your balance and progress in Shopify admin, and in some regions, you can also make manual payments from the linked bank account.
• Know the loan rules (where applicable): For Shopify Capital loans, Shopify notes a maximum repayment term of 18 months and minimum payment requirements, which can matter if sales slow down. 

What are the Key Benefits of Using Capital?

• You get funding inside the Shopify admin, so you can apply and manage everything in one place.
• Repayments are connected to your sales. This makes cash flow easier to manage during slower weeks.
• You get the total payback amount upfront, so you can plan clearly. 

Things to Consider Before Opting for Capital?

• Repayments come out automatically from sales, so your day-to-day cash on hand will feel less.
• Early payoff doesn’t always reduce the cost of borrowing, so read the offer details carefully.
• Eligibility and future offers can depend on your repayment history, disputes/chargebacks, and overall store performance.

Final Thoughts: Shopify Capital Review. Is it Good or Bad?

Shopify Capital can feel like a practical option when you want cash upfront to grow your Shopify store. 

Before you accept an offer, think about why you need the funds and how you’ll use them to generate returns. If you’re unsure, take a moment, run the numbers, and choose the option that keeps your store healthy long term.

FAQs of How does Shopify Capital funding work for a small business​

1. What is Shopify Capital?

Shopify Capital is Shopify’s funding program that offers eligible merchants either a loan or a merchant cash advance. You typically use it to invest in inventory, marketing, hiring, or other growth needs. 

2. How much does Shopify Capital offer?

Shopify says Capital can offer up to $2M (or local-currency equivalent). Your actual offer depends on your store’s performance and risk profile.

3. Can you pay off Shopify Capital early?

Yes, Shopify lets you pay a custom amount or the full remaining balance from Finance > Capital > Make a payment. 

4. How does repayment work in Shopify Capital?

Repayment takes a fixed percentage of your sales. You pay more when sales are great and less on slow days. You can also make a manual payment from your Capital page if you want to close it out faster.

5. How to apply for Shopify credit?

If you have an offer, you can apply for Shopify Credit inside your Shopify admin and complete the application there. Many merchants get a decision in minutes, but an offer to apply doesn’t guarantee approval.

6. Is Shopify Capital a good idea?

It can be a good fit if you have a clear plan to use the funds to generate profit. It’s not a great fit if your margins are thin or your sales are highly seasonal.

7. How long does it take to get approval from Shopify Capital?

Shopify says applications are usually reviewed within 1–3 business days, though it can take longer in some cases. 

8. How does Shopify Capital funding work for a small business​?

Shopify Capital works by showing you a pre-approved funding offer inside Shopify admin > Finance > Capital. Once you accept it, Shopify sends a lump sum to your business bank account. You repay it automatically, usually as a fixed percentage of your daily sales, until the total is repaid.

About the author

Vineet Nair

Vineet is an experienced content strategist with expertise in the ecommerce domain and a keen interest in Shopify. He aims to help Shopify merchants thrive in this competitive environment with technical solutions and thoughtfully structured content.