Square Loans and Shopify Capital work the same basic way: the platform you sell through offers you a loan based on your sales, charges a set fee instead of interest, and collects repayment as a fixed share of your daily sales. The differences are size and fit. Square offers $100 to $500,000 to businesses that take card payments through Square, while Shopify Capital offers up to $2 million to online stores on a Shopify plan, with an 18-month maximum term and published minimum repayments. Which one you can use depends mostly on where you already sell.
For more on each, read our Square Loans review and our guide to Shopify business loans, or see other head-to-heads in the lender reviews hub. Figures below come from each company’s own site unless marked.
Square Loans vs Shopify Capital at a glance
Figures checked on September 21, 2026. Pricing is shown as each company quotes it.
| Square Loans | Shopify Capital | |
|---|---|---|
| Who can get an offer | Square sellers, by invitation | Shopify merchants, based on store sales |
| Loan amount | $100 to $500,000 | Up to $2 million |
| Pricing as quoted | One flat loan fee; no interest | Fixed fee or fixed monthly fee, depending on the offer |
| Repayment | Fixed percentage of daily card sales, plus minimum payments listed on your offer | Fixed percentage of daily sales, only on days you make sales |
| Maximum term | Not stated by Square; NerdWallet (third-party) reports 18 months | 18 months |
| Minimum payments | Set on your offer; NerdWallet (third-party) reports one-eighteenth of the loan every 60 days | 30% of the total by month 6 and 60% by month 12 |
| Eligibility signals | More likely with $10,000+ processed in a year and Square used at least 20 days in the last year | Active Shopify plan and operating 3+ months; Shopify Payments or an approved third-party provider |
| Credit check | Applying doesn’t affect your credit score; each application is subject to credit review | “No credit checks, no impact to your personal credit score” |
| Collateral and guarantee | None under $100,000; may file a UCC lien above $100,000; personal guarantee above $250,000 | “No personal liability” |
| Speed | Next business day, or instantly with Square Checking (help center says 1 to 3 business days) | As quick as two business days, if approved |
| Lender | Square Financial Services, Inc., a Utah-chartered industrial bank owned by Block, Inc. | WebBank |
How each one works
Both are loans made by a bank, arranged through the platform. “All Square loans are issued by Square Financial Services, Inc., a Utah-Chartered Industrial Bank” (Square Support), which is a wholly owned subsidiary of Block, Inc. On the Shopify side, “all funding through Shopify Capital in the United States is issued by WebBank” (Shopify Help Center).
Both decide mainly from your sales data on the platform. Square says its loans “are offered by invitation,” and it reviews accounts daily for offers (Square eligibility FAQs). Shopify uses “machine learning to analyze data relating to your business, including your sales, disputes, and customer engagement” (Shopify Capital). Without a Square invitation, there’s no loan to apply for.
What each costs
Both charge a fee rather than interest. A fixed fee is a dollar amount you agree to up front; it doesn’t grow over time the way interest does. That makes the total cost easy to see, but it isn’t an APR (annual percentage rate), which spreads the cost over the time you have the money. The faster you repay a fixed fee, the higher the APR it works out to.
Square offers “no interest, just one flat fee,” and says “the total cost of the loan is simply the loan fee, which is the difference between the total owed amount and the initial loan amount” (Square Loans). As you choose a loan amount in the offer screen, “the fee and hold rate will adjust accordingly.” Prepaying doesn’t change the cost, and there are no late fees.
Shopify offers two structures. With a fixed fee, you pay one fee for the life of the loan, and “even if you pay off your entire balance, the cost of funds remains the same.” With a monthly fee, you’re charged a fixed dollar amount each month, so repaying sooner costs less.
Neither company publishes a fee range, so the price you see is set by your offer. Ask for the total repayment amount and the share of daily sales that will be withheld, and keep both in writing.
Worked example: Shopify’s own $100,000 examples
Shopify’s help center shows a $100,000 loan with a 13% fixed fee costing $13,000 whether you repay in 3 months or 11. The same $100,000 with a $1,400 monthly fee costs $4,200 if repaid in 3 months or $15,400 if repaid in 11. The fixed fee costs less if repayment takes longer; the monthly fee costs less if you repay fast. Square’s flat fee works like Shopify’s fixed fee: the dollar cost stays the same however quickly you repay.
Who qualifies
Square Loans
- Businesses that have processed at least $10,000 in a year and used Square at least 20 days in the last year “are more likely to be eligible.”
- Square also looks at payment frequency, customer mix, disputes, reserves and failed bank debits. Each application is subject to credit review.
- As of August 2026, businesses that sell CBD products or services aren’t eligible for new Square loans.
- One active loan per location at a time.
Shopify Capital
- An active Shopify plan and a store operating for at least three months, or a first sale more than three months ago (Shopify eligibility).
- Shopify Payments or an approved third-party payment provider.
- Offer size is “primarily based on your sales performance on Shopify’s platform.”
- You might qualify for a second loan before the first is fully repaid.
Choose Square Loans if…
- You already take card payments through Square.
- You need a small amount: Square offers start at $100.
- You want funds the next business day, or instantly into Square Checking.
- You’d rather not pledge collateral on a loan of $100,000 or less.
Choose Shopify Capital if…
- You sell online through a Shopify store that has been running for 3+ months.
- You need more than $500,000. Shopify goes up to $2 million.
- You want no credit check and no personal liability.
- You plan to repay quickly and are offered the monthly-fee option, which costs less the sooner you pay.
If you sell through both, you may see offers from each. Compare the total repayment and the daily withholding, not just the loan amount. Our list of Shopify Capital alternatives covers options outside either platform.
Pitfalls to watch
- Minimums still apply in slow months. Both collect a share of daily sales, but both also set minimums. Square may raise the repayment rate and debit your Square balance or bank account if you miss one. Shopify says missing its 30% and 60% marks “might result in an event of default.”
- Early payoff may not save money. Square’s flat fee and Shopify’s fixed fee stay the same if you repay early.
- Your platform is tied to the loan. Repayment comes out of sales on that platform, so switching processors while a balance is open needs planning.
- No credit building. Square says it doesn’t report to third-party credit bureaus, so on-time repayment won’t build your business credit file there.
FAQ
Is Square Loans or Shopify Capital cheaper?
It depends on your offer. Compare the total repayment on offers of the same size, and factor in how fast you expect to repay.
Do they check my credit?
Shopify says “no credit checks.” Square says applying doesn’t affect your credit score, though each application is subject to credit review.
Can I apply if I haven’t received an offer?
No. Square Loans are by invitation, and Square reviews accounts daily for new offers. Shopify bases eligibility and offer size on your store’s sales on its platform.
How long do I have to repay?
Shopify’s maximum term is 18 months. Square lists the maturity date and minimums on your offer rather than on its site; NerdWallet, a third-party review site, reports 18 months.
Next step
If you’d like to see how a platform offer compares with other financing, SMB Compass can help you compare options from the lenders we work with. Start with our guide to ecommerce revenue-based financing or business loans.
Sources
- Square: Square Loans
- Square Support: Get started with Square Loans
- Square Support: Eligibility FAQs
- Square Support: Repayment FAQs
- Shopify: Shopify Capital
- Shopify Help Center: Shopify Capital in the United States
- Shopify Help Center: Shopify Capital eligibility
- NerdWallet (third-party): Square Loans review (updated January 13, 2026)
About this page. Written by Ezra Cabrera, Content Team Lead at SMB Compass. Figures were checked against each lender’s own website on September 21, 2026; lenders change their terms, so confirm current terms before you apply, and let us know if you spot a figure that has changed. SMB Compass is a business financing broker: we don’t lend our own money, and we are paid by the lenders we place loans with. This page is general information, not financial, legal or tax advice.