October 24, 2025

Lender Comparisons

Compare PayPal Working Capital & Shopify Capital

Compare PayPal Working Capital and Shopify Capital on rates, eligibility, and application speed. Find the best fit for your business.

Jesse Spence

Finance content writer / Market researcher

PayPal Working Capital vs Shopify Capital: Which Lender Is Right for Your UK Business?

This guide compares PayPal Working Capital and Shopify Capital for UK SMEs selling online. It is for owners who need fast cash for stock, ads, or seasonal peaks. We explain products, costs, speed, and eligibility in plain English. With tighter margins and volatile demand, choosing between two revenue‑linked options matters now.

TL;DR

Both fund against sales and charge a fixed fee instead of interest.
PayPal suits businesses taking most payments by PayPal; Shopify suits eligible Shopify stores.
PayPal offers up to £160k (£225k repeat) with a 90‑day minimum repayment rule.
Shopify Capital UK offers merchant cash advances via YouLend with no set term; you repay a percentage of daily sales.
Cash flow impact depends on the percentage you choose (PayPal) or the remittance rate set (Shopify).
Pick the one that fits your payment rails and data footprint.

Products and Terms at a Glance

PayPal Working Capital overview, loan sizes, fees, repayment style, terms, eligibility

Product type: a working capital cash advance repaid from future PayPal sales. First mention link: working capital loans.

Loan sizes: PayPal states UK businesses can access up to £160,000, rising to £225,000 for repeat borrowers, subject to your PayPal trading history and other criteria. Funds typically arrive in minutes after approval. Source: PayPal UK Working Capital page.

Fees: one fixed fee disclosed upfront. No periodic interest, late fees, or early‑repayment fees. Source: PayPal UK.

Repayment style: automatic daily deductions as a percentage of PayPal sales, with a minimum payment required every 90 days. Source: PayPal UK.

Terms: there is no fixed term. The duration depends on your sales volume and the percentage you choose. PayPal also sets a 90‑day minimum repayment requirement. Guidance on 5% or 10% minimum every 90 days is provided in PayPal help materials.

Eligibility: PayPal Business account in good standing, trading history and annual PayPal sales volume that meets PayPal’s thresholds. PayPal indicates eligibility and maximum advance are based on sales history, account behaviour, and other criteria.

Pros of PayPal Working Capital

Fast access, often within minutes after approval.
One transparent fixed fee; no compounding interest.
Flexible repayments that rise and fall with PayPal sales.
No personal guarantee mentioned in standard materials; approval based on PayPal sales data.
Clear 90‑day minimum repayment framework helps keep the balance reducing.

Cons of PayPal Working Capital

Only sales processed through PayPal count for automatic deductions. If your customers mostly pay by card on other gateways, repayments may be slower.
The fee is fixed. Paying off early does not reduce the fee.
Minimum 90‑day repayments must be met even if sales are slow, which can pinch cash flow.
Maximum advance size depends on your PayPal throughput; new or low‑volume sellers may receive small offers.

Shopify Capital overview, loan sizes, fees, repayment style, terms, eligibility

Product type: in the UK, Shopify Capital provides merchant cash advances (purchase of receivables) via partner YouLend. You receive a lump sum; you remit a fixed percentage of daily sales until the agreed total is remitted. Source: Shopify Help UK.

Loan sizes: offers vary by store performance. Shopify’s public materials state availability to select merchants in the UK, with funding sizes determined algorithmically. Published ranges in marketing content show high ceilings, but your offer depends on your data.

Fees: a fixed fee added to the amount to remit. No compounding interest. The total to remit and remittance rate are shown with your offer. Source: Shopify Help UK.

Repayment style: a fixed percentage of your store’s gross daily sales is debited automatically. There is no deadline in the UK; on days with no sales, there is no remittance. Source: Shopify Help UK.

Terms: there is no fixed term for UK MCAs. Funding decisions are typically reviewed within 1–3 business days; funds land in your business bank account after approval. Source: Shopify Help UK.

Eligibility: available by invitation to eligible Shopify merchants. Eligibility is decided automatically based on sales, disputes, and other risk signals. Your principal place of business and bank account must be in the UK to take a UK offer. Source: Shopify Capital pages.

Pros of Shopify Capital

Integrated directly into the Shopify admin. Application and tracking are simple.
Remittances pause when you have no sales, which can smooth cash flow.
No fixed term or deadline in the UK for MCAs; you repay as you sell.
Fixed fee is known upfront; no compounding interest.
Can unlock additional offers before fully remitting a prior advance if eligible.

Cons of Shopify Capital

Only available to eligible Shopify stores; not an option if you do not use Shopify.
The fee is fixed. Remitting early does not reduce the cost.
Gross sales basis includes taxes and shipping in the remittance calculation, which can increase daily deductions.
Offer sizes can be small for newer or lower‑volume stores.

Costs and Repayments in Practice

Both products use a revenue‑linked funding model with a fixed fee. There is no APR in the traditional sense. The practical cost depends on sales speed and the percentage remitted each day.

Feature	PayPal Working Capital	Shopify Capital (UK MCA)
Funding structure	Cash advance with one fixed fee; repay as a % of PayPal sales.	Purchase of receivables via YouLend; remit a % of daily gross sales.
Typical size guidance	Up to £160k (first advance) or £225k (repeat), subject to eligibility.	Offer size varies by store data; eligibility by invitation in UK.
Fees	One fixed fee. No interest, late, or early‑repayment fees.	One fixed fee added to total to remit. No compounding interest.
Repayment	Daily % of PayPal sales + minimum every 90 days.	Daily % of gross store sales. No deadline in UK.
Funding speed	Often minutes after approval.	Admin review 1–3 business days; funds then paid to your bank.
Platform lock‑in	Requires PayPal sales to repay efficiently.	Requires Shopify store; remittances tied to Shopify sales.

Worked example: PayPal Working Capital

Scenario. An online retailer takes most payments by PayPal. They accept a £50,000 advance with a fixed fee of £4,000 (illustrative) and choose a 15% repayment percentage. Total repayable is £54,000. If monthly PayPal sales average £80,000, daily deductions average roughly £400 (15% of £2,667). At that pace, the balance clears in about 135 days. If sales dip, repayments slow, but the borrower must still meet the 90‑day minimum (5% or 10% of total owed depending on the term estimate). Sources: PayPal UK page; PayPal help.

Worked example: Shopify Capital (UK)

Scenario. A Shopify store accepts a £40,000 advance with a total to remit of £44,800 (illustrative fee of 12%). The remittance rate is set at 12% of gross daily sales. If monthly gross sales average £120,000, daily remittances average about £480 (12% of £4,000). At that pace, the balance clears in roughly 93 days. On quieter weeks, remittances fall because they track gross sales. There is no UK deadline for MCAs; however, the fixed fee does not reduce if you remit early. Source: Shopify Help UK.

Assumptions. The fee percentages used above are realistic SME examples, not quotes. Actual fees, remittance rates, and timelines vary by your trading data and the options displayed in your account. Always review your offer screen before accepting.

PayPal vs Shopify Capital: see cost shape, limits, speed, and fit in minutes

This dashboard turns the guide into side‑by‑side charts for UK SMEs. Read bars as ranges and dots as typical examples. Rates use fixed‑fee equivalents. Amounts show ceilings and the worked examples. Terms reflect that both are revenue‑linked, not fixed‑term. Speed splits application‑to‑decision and decision‑to‑funds. Use it to judge day‑one cost, realistic facility size, time‑to‑cash, and whether platform lock‑in matches how you sell today.

The bars show the fee‑as‑% of advance from the worked examples; the dot marks the typical point. For PayPal, the example is £50,000 with a £4,000 fee (8%). For Shopify, the example is £40,000 with a £4,800 fee (12%). Pricing moves with credit profile, sector risk, security, and the effective term created by your sales pace. A 1% rate gap on £100,000 over 5 years changes the monthly by about £45 and total interest by about £2,728, which shows why even small deltas matter on larger sums. Prioritise a lower typical when you will draw once and repay steadily; tolerate a wider range if speed or flexibility is worth more than marginal cost.

Bars map example to ceiling. PayPal shows the £50,000 example and a first‑advance ceiling of £160,000; repeat borrowers may see up to £225,000. Shopify varies by store data; the example here is £40,000. Use cases: £25–£60k suits stock and ad bursts; £100k+ can cover fit‑out or larger capex. Larger fixed facilities may exist elsewhere; they matter when commitments span many months. Remember affordability and security drive your usable ceiling; headline maximums are not guarantees.

Both products have no fixed term; the bar reflects that repayments track sales. Longer terms reduce monthly cost but increase total interest on traditional loans. As an illustration, at £50,000, 3 years vs 6 years at 8% makes the monthly about £1,567 vs £877 and adds roughly £6,714 of interest over the longer span. Longer terms suit seasonal cash flow or growth plans that need headroom. For these MCAs, model your sales to see how quickly remittances clear and whether that cadence is comfortable.

Each bar splits time from application to decision, then decision to funds, using mid‑points. PayPal typically approves and funds within minutes after approval, so both stages are near‑instant. Shopify reviews MCAs in about 1–3 business days; funds then reach your bank shortly after. What slows deals: document checks, bank statements, and any security or identity queries. If payroll is due in 5 days, PayPal’s same‑day path is safer. Fast paths assume clean files and quick signatures.

Shown are application and late fees. Both products charge a single fixed fee and show no periodic interest, late fees, or early‑repayment fees in standard materials. Items not captured here include any external legal or valuation costs on other products. Impact example: a £150 fee on a £20,000 loan adds 0.75% to day‑one cost. Compare fees alongside the fixed fee and your expected remittance pace, not in isolation.

Arrangement % is calculated on the principal and is often deducted upfront or added to balance on other products. For these two, pricing is via a fixed fee, so the bar sits at 0%. Worked example for context: 1.5% on £250,000 equals £3,750. Trade‑offs matter: a lower rate with a higher fee can still be cheaper over long terms. For revenue‑linked funding, focus on total to remit and your sales‑driven timeline.

Scoring uses simple rules: booleans = 1, integrations are a count, UX on a 1–5 scale based on the guide. Open banking speeds underwriting; APIs help multi‑account firms; mobile and admin UX support on‑the‑go approvals. Busy owners and multi‑entity groups benefit most from strong integrations and UX. To move faster, gather statements early and confirm how remittances link to your sales channels.

Axes separate star ratings on the left and NPS on the right. Review volume matters: more reviews give a steadier signal. Branch and case experiences vary; service can differ by situation. Read recent reviews and match themes to your needs, such as speed, document asks, and portal ease. Where data is not published, treat zero values here as placeholders and rely on fresh reviews.

Speed and Service

PayPal. Applications are quick. If approved, PayPal says funds usually reach your PayPal Business account within minutes. Repayments begin automatically as sales settle. A minimum 90‑day payment rule applies, and PayPal provides options to make manual payments if needed.

Shopify. In the UK, Shopify reviews MCA applications within 1–3 business days. After approval, funds are transferred to your bank account and daily remittances start within two business days. Tracking and statements are available in the Shopify admin under Finance > Capital.

Who Each Lender Suits

Typical scenario for PayPal Working Capital

You process a significant share of receipts via PayPal and want repayments to match those sales.
You value rapid funding and a single fixed fee for certainty.
You have predictable PayPal volume, so the 90‑day minimum will not strain cash flow.
You prefer to avoid traditional unsecured business loans with interest and fixed instalments.

Typical scenario for Shopify Capital

You run your shop on Shopify and prefer funding integrated with your platform.
Your sales are seasonal, so paying only when you sell helps cash flow.
You want to avoid a fixed term or set deadline while maintaining momentum.
You are comfortable that remittances are calculated on gross sales, including taxes and shipping.

How to Apply

Application steps and documentation required for each lender

PayPal Working Capital. Check eligibility in your PayPal Business account. Select an advance amount displayed to you. Choose a repayment percentage. Review the fixed fee and the 90‑day minimum repayment requirement. Accept the offer to receive funds into your PayPal account. Keep sales flowing via PayPal to maintain daily deductions. You can make manual repayments from your PayPal balance or a linked bank account.

Useful pointers: PayPal states advances and limits depend on your PayPal sales history and account behaviour. The minimum payment is required every 90 days. PayPal cites fast funding on approval and one transparent fixed fee. See the PayPal Working Capital page and help materials.

Shopify Capital (UK). Offers appear in your Shopify admin under Finance > Capital if you are eligible. Choose from the pre‑configured options. Each option shows the amount you receive, the total to remit, and the remittance rate. Submit the application; review and accept the Receivables Purchase Agreement. Shopify reviews requests within 1–3 business days. Funds are then deposited into your business bank account. Remittances start within two business days and are taken automatically as a percentage of daily sales. You can make lump‑sum remittances; the fixed fee does not change if you repay early.

Final Verdict: Which Lender Fits Your Business Best

Choose PayPal Working Capital if…

Your PayPal channel is strong and stable, so repayments clear at pace.
You want funds very quickly to seize a stock or ad opportunity.
You prefer a clear 90‑day framework and the ability to top up via manual payments if needed.
You want to avoid compounding interest and prefer a single fixed fee.

Choose Shopify Capital if…

You are a Shopify merchant who wants funding inside your admin with minimal friction.
Your revenue is lumpy and you value remittances that pause on no‑sales days.
You want no fixed term or deadline in the UK, accepting that fees do not reduce if you repay early.
You are comfortable with remittances calculated on gross sales and with the platform’s eligibility model.

Both lenders can help UK SMEs fund growth without traditional interest. The right choice depends on where you transact and how your cash flow behaves. If you want an independent view across more types of finance, including term loans, revolving credit, and invoice finance, speak to Funding Agent or share your situation via our enquiry form.

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FAQs

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