What is Shopify Capital?

What is Shopify Capital?

Shopify Capital is a service provided by Shopify where they offer loans to Shopify merchants based on their sales history on the web platform. This means Shopify merchants can avoid the long application process typically associated with loans. Shopify will deposit the funding into your business bank account and the repayment process is super simple.

How the Loans Work

In order to pay them back, rather than sending money to Shopify each month to repay the loan, Shopify will automatically take a percentage of your daily sales until the total amount owed is repaid over 12 months. All of the loans have a 12-month term which means you must repay your loan within 12 months.  

So what if you don’t have enough sales to repay the loan?

Shopify Capital divides the 12 month loan term into six 60-day repayment periods that they call milestones. There is a minimum amount that you must repay each milestone. 

If your sales on Shopify are insufficient to meet this amount, the difference is debited from your business account.

So how much funding can you get?

Shopify Capital offers loans ranging in size from $200 to $1 million. 

How much will it cost you?

Shopify doesn’t advertise their interest rates but an example on their website is pretty telling. 

The example they provide is a $5,000 loan with a borrowing cost of $650. That means that you would be paying back your principal plus 13% interest. 

Large national banks charge anywhere from 2.5-5%. But online lenders charge from 13%-70% — so Shopify is just on the lower end of that “online lender” category. 

Hypothetical loan has a 10% repayment rate which means Shopify Capital will deduct 10% of your daily sales until the $5,650 is repaid over the course of 12 months. (I think a disclaimer is important here: This is just an example. Contact Shopify Capital to learn about your options and how much it will cost your business).

How much money have they loaned?

Well as of the end of March – just two and a half months after they launched, Shopify Capital had $192 million of loans outstanding. 


As you can see, Shopify Capital is a great way to get funding if you already have a Shopify account and are looking to raise capital without finding investors and giving away equity.

Thanks again!

Deepak Devjani (twitter.com/ddevjani)