Need funding for your Shopify store or eCommerce business? Here's a quick breakdown of two popular options: Shopify Capital and Onramp Funds. Both provide fast financing, but their terms and repayment structures differ significantly.
- Shopify Capital: Designed for U.S.-based Shopify merchants. Repayments are tied to daily sales, with fixed fees and rigid terms (up to 18 months). No credit checks required.
- Onramp Funds: Open to various eCommerce platforms with flexible, revenue-based repayments. Requires $3,000+ in monthly sales, and funds are available within 24 hours.
Quick Comparison
| Feature | Shopify Capital | Onramp Funds |
|---|---|---|
| Eligibility | Shopify merchants only | eCommerce businesses ($3,000+ sales) |
| Repayment | Fixed term, % of daily sales | Revenue-based, flexible payments |
| Funding Speed | Quick approval | Within 24 hours |
| Fees | Fixed fee | 2-8% flat fee |
| Platforms | Shopify only | Multiple eCommerce platforms |
Which to choose? If you're exclusively on Shopify, Shopify Capital may work for you. For flexibility and multi-platform support, Onramp Funds is a better fit.
🔥 Shopify Capital Eligibility Review: Pros and Cons
1. Shopify Cash Advance Features
Shopify Capital offers two repayment structures and has funded over $3 billion, increasing merchant sales by 36%.
Funding Structure
Merchants can choose between two repayment options, each designed to fit different business needs:
| Feature | Fixed-Fee Structure | Monthly-Fee Structure |
|---|---|---|
| Fee Type | One-time fixed percentage | Monthly fixed dollar amount |
| Payment Method | Percentage of daily sales | Percentage of daily sales |
| Cost Example | $13,000 fee on a $100,000 loan | $1,400 per month until repaid |
| Best For | Merchants expecting quick repayment | Businesses with consistent sales flow |
These options provide flexibility based on how quickly a business can repay its advance.
Key Terms and Requirements
- Maximum Term: Repayment must be completed within 18 months.
- Minimum Repayment Milestones:
- 30% of the loan must be paid within 6 months.
- 60% of the loan must be paid within 12 months.
Eligibility Criteria
To qualify for a Shopify Cash Advance, merchants need to meet these requirements:
- Have an active Shopify subscription for at least 3 months.
- Use Shopify Payments or an approved payment provider.
- Set their store currency to USD.
- Maintain strong sales performance.
- Avoid chargebacks and disputes.
Security and Documentation
Once eligibility is confirmed, merchants should understand the required documentation and collateral. In the U.S., all funding is issued by WebBank through Shopify Capital, ensuring compliance and proper oversight.
"If you have the sales volume to support repayment, it's easy to qualify. And since your loan amount, rate, and repayment are based on your Shopify account, there's minimal paperwork." - Anna Serio, Finder
Real-World Example
Here’s how the costs break down: A $100,000 advance with a fixed 13% fee will cost $13,000, regardless of how fast it’s repaid. However, under the monthly-fee structure, quicker repayment can save money - paying it off in 3 months would cost $4,200, while taking 11 months would result in $15,400 in fees.
2. Onramp Funds Features
Onramp Funds takes a revenue-based approach to financing, offering straightforward, consistent terms. This makes it easier for Shopify store owners and other eCommerce businesses to access funds quickly and efficiently.
Funding Structure and Eligibility
Onramp Funds offers clear terms with no hidden surprises:
| Feature | Details |
|---|---|
| Fee Range | 2-8% flat fee |
| Minimum Sales | $3,000 monthly average |
| Business Types | LLC, Single-Member LLC, C-Corp, S-Corp |
| Location | U.S.-based businesses only |
| Credit Requirements | No personal credit checks |
| Repayment Options | Variable (% of sales) or fixed payments |
Application Process
Getting funded is fast and simple, often within 24 hours. Here's how it works:
- Use the online funding calculator to estimate your eligible amount.
- Provide read-only access to your Shopify store data.
- Review and choose from available funding options.
- Receive funds directly into your business bank account.
"Applied, got our offer, and had cash in our bank account within 24 hours. Their Austin, TX based team was very professional and helped me deploy the cash to effectively grow our business." – Nick James, CEO Rockless Table
Payment Structure
Onramp Funds offers a repayment system that adjusts to your business's performance, making it easier to manage cash flow:
- Revenue-Based Payments: Payments scale with your sales, so you’re never overburdened.
- No Fixed Minimums: No need to worry about meeting monthly minimum payment requirements.
- Flat Fees: A single, upfront fee with no hidden charges.
- Flexible Options: Repayment adapts to fluctuations in sales volume.
This flexible structure ensures that businesses can focus on growth without being tied down by rigid repayment terms.
Platform Integration
Onramp Funds integrates seamlessly with a variety of eCommerce platforms, making it accessible for businesses operating across multiple channels. Supported platforms include:
- Amazon
- Walmart Marketplace
- BigCommerce
- WooCommerce
- Squarespace
- TikTok Shop
This broad compatibility makes it a versatile choice for eCommerce businesses looking for a reliable financing solution.
"Onramp's process is very straightforward and easy to navigate. I had funds in my account within a day of final approval." – Adam B., The Full Spectrum Company
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Benefits and Drawbacks
Understanding these models helps identify which funding option aligns best with your business requirements.
Shopify Cash Advances
Shopify Capital offers financing, often structured as seller loans, with specific features that could influence your business operations:
| Benefits | Drawbacks |
|---|---|
| Works seamlessly with the Shopify platform | Available only in the U.S., Canada, and U.K. |
| Flat fee structure (no traditional APRs) | Fixed 12-month term with one-sixth of the loan due every 60 days |
| No benefits for early repayment | |
| Payments tied to variable remittance rates | |
| Terms are non-negotiable |
Now let’s explore how Onramp Funds offers a different approach to financing.
Onramp Funds
Onramp Funds provides revenue-based financing, offering a unique model with its own set of pros and cons:
| Benefits | Drawbacks |
|---|---|
| Quick funding - typically within 24 hours | Requires a minimum of $3,000 in monthly sales |
| Transparent fees (ranging from 2-8%) | Limited to U.S.-based businesses |
| Payment flexibility | Requires integration with the platform |
| No personal credit checks needed | Revenue verification is mandatory |
| Compatible with multiple platforms | Specific business entity requirements apply |
| Customizable funding amounts | Sales history review required |
Key Differences in Repayment Structure
The repayment models of these two options have a major impact on cash flow management. Here’s how they differ:
Shopify Capital:
- Operates on a fixed 12-month term.
- Payments are required every 60 days.
- No flexibility in the repayment schedule.
- The entire loan must be repaid, even if paid off early.
Onramp Funds:
- Uses a revenue-based repayment model.
- Payments adjust based on sales performance.
- No fixed monthly minimums.
- Payment schedules adapt to your business’s revenue flow.
This breakdown highlights how these funding options cater to different needs. Shopify Capital’s rigid terms may suit businesses with predictable sales but could pose challenges for those with fluctuating revenue. Onramp Funds, on the other hand, offers more adaptable payments tied to performance, making it a better fit for businesses with variable sales.
Conclusion
Here's a quick breakdown to help you decide which funding option fits your needs.
For Shopify Capital:
- Works exclusively with Shopify
- Offers fixed repayment schedules
- Suits businesses with steady, predictable sales
For Onramp Funds:
- Supports selling on multiple platforms
- Focuses on inventory funding
- Provides fast access to capital
- Uses flexible, revenue-based repayments
- Offers competitive fee structures
Choosing between these options largely depends on your business model and expansion goals. Shopify Capital's exclusivity to its platform can be limiting for sellers looking to grow across multiple marketplaces. On the other hand, Onramp Funds provides flexibility for businesses operating on various platforms, making it ideal for those seeking quick and adaptable funding solutions.
Your decision should align with your current sales approach and future growth plans. If you're looking for fast funding with flexible terms across multiple platforms, Onramp Funds stands out as the better choice. But if your business is firmly rooted in Shopify's ecosystem, Shopify Capital could still meet your needs, despite its limitations.
"Applied, got our offer, and had cash in our bank account within 24 hours. Their Austin, TX based team was very professional and helped me deploy the cash to effectively grow our business." – Nick James, CEO Rockless Table
FAQs
How does repayment flexibility differ between Shopify Capital and Onramp Funds?
Shopify Capital repayments are based on a fixed percentage of your daily sales, which means the amount you pay fluctuates depending on your store's performance. However, there is a maximum repayment term of 18 months, regardless of your sales volume.
On the other hand, Onramp Funds offers more tailored repayment options designed to align with your business's cash flow needs, providing greater flexibility to help you manage your finances effectively.
How does the fee structure of Shopify Capital compare to Onramp Funds, and how does it affect overall repayment costs?
The fee structure of Shopify Capital differs from that of Onramp Funds in several key ways, which can significantly impact your total repayment costs. Shopify Capital typically charges a fixed fee that is repaid through a percentage of your daily sales, meaning repayment amounts fluctuate based on your store’s performance. Onramp Funds, however, uses a different approach that may offer more predictable and transparent repayment terms.
Understanding these differences is crucial for evaluating which option aligns best with your business needs. While Shopify Capital's repayment model ties directly to your sales, Onramp Funds provides a tailored funding solution designed to help eCommerce businesses scale efficiently while keeping costs manageable.
What do I need to qualify for a Shopify Cash Advance, and how can I improve my chances of approval?
To qualify for a Shopify Cash Advance, your store must meet specific criteria. First, your business needs to be actively subscribed to a Shopify plan and operational for at least three months, or you must have processed your first sale over three months ago. Additionally, you must use Shopify Payments or an approved third-party payment provider. Your store also needs to be located in the United States, Canada, Australia, or the United Kingdom, with currency settings matching the requirements for your region.
To improve your chances of approval, focus on maintaining consistent sales performance, engaging with customers, and complying with Shopify's Terms of Service. Shopify evaluates your eligibility based on these factors, so ensuring your store runs smoothly and adheres to platform guidelines is key.
