The offer in your seller dashboard is not a regular loan

Why this matters more in October than in any other month

The offer tends to arrive right when you need it. Inventory for the holidays is due at the factory, the payout from last month is still two weeks out, and the dashboard shows a number with a button under it. Many sellers click. Some of them should.

The point of this guide is not that platform financing is bad. It is fast, it asks for almost nothing, and for a seller with no tax return and no time it can be the only door open. The point is that it is a different kind of money from a loan, it is priced as a fee rather than a rate, so the annual cost is not on the screen, and the repayment shape can fight the very inventory it paid for. Know what you are signing. Then decide.

1. Three structures, named plainly

Almost every offer a seller will ever see is one of three things, whatever the dashboard calls it.

A merchant cash advance is the third column by structure. Invoice factoring is its cousin, selling a receivable at a discount. Legal form varies by product and by country, so the columns describe how the money behaves, not what a contract calls it.

2. What Shopify Capital actually is

In the United States, Shopify Capital funding is issued by WebBank, and Shopify's own help pages call the product a loan. It is one. What makes it different from the loan your bank would write is the price and the repayment.

Shopify lists two structures. On the fixed-fee version, the cost is set the day you sign. Shopify's own illustration is a $100,000 loan with a 13% fee, which costs $13,000 whether it is repaid in three months or eleven. You can pay the balance off early. The fee stays the same. On the monthly-fee version, a flat monthly charge accrues for as long as the balance is open, so paying sooner does lower the total. Read which one you were offered; the word "loan" appears on both.

Repayment on either is a fixed percentage of each day's Shopify sales, set in the offer. New loans must be repaid within 18 months, with minimum checkpoints at 6 and 12 months (30% and 60%, as Shopify defines them). Miss a checkpoint and the help page says it might be an event of default. And because the money comes out of Shopify payouts, the loan is tied to that one channel. Sales on Amazon or in a retail store do not pay it down, and a slow month on Shopify stretches it.

3. What the Amazon Lending tile actually is now

Amazon stopped making loans to sellers itself in March 2024. The financing tile in Seller Central did not go away; it became a doorway to outside providers, by invitation. As of October 20, 2026, Amazon's program page lists a merchant cash advance from Parafin, fixed-fee term loans from Lendistry, Uncapped, and QuickBooks Capital, lines of credit from Uncapped and Slope, and a route to SBA 7(a) loans through iBusiness Funding. The list rotates. A provider named in earlier coverage is no longer listed.

So the honest statement about Amazon is not "it is an advance." It is a mixed menu. One tile can hold a fixed fee repaid from payouts and, two rows down, an SBA loan with an interest rate and a term measured in years. Sizes depend on the provider, from a few thousand dollars for the smallest sellers up to millions for the largest. Amazon says applying will not affect your personal credit, and that providers weigh multiple factors; it does not publish how each one underwrites. The only safe habit is to read each offer against the three columns above before touching the button.

4. Factor to APR, the math the dashboard does not show

A fixed fee is usually written as a factor. Borrow $50,000 at a 1.35 factor and you repay $67,500. The $17,500 is the cost, and it is the same number whether the money is out for three months or twelve. That is exactly why a factor is not a rate, and why two offers with the same factor can cost wildly different amounts per year.

There are two ways to turn a factor into an annual figure, and the article will use both, named. The simple method spreads the fee over the payback period and annualizes it. For $17,500 on $50,000 repaid over six months, that is 35% for half a year, or 70% a year. It is the number most comparison sites print. It also understates the cost, because the balance is shrinking every day you remit and you keep paying the full fee on money you have already given back. Counted the way a loan's APR is counted, with the balance falling as each payment lands, the same deal is closer to 126%. We show the amortizing number in the chart because it is the one a bank's rate can be compared with.

Our arithmetic on a hypothetical $50,000 advance, not any provider's offer. Amortizing APR solves for the daily rate at which equal business-day remittances repay the advance, times 252. The simple method gives lower figures for the same deals (70% at six months on a 1.35 factor; 60% on a 1.30), and both methods agree on the shape. Repaying in four months costs about twice as much per year as repaying in eight.

Two consequences follow that most sellers find out late. First, a strong month is expensive. The remittance percentage sweeps more on a good day, the balance clears sooner, and the same fixed fee lands on fewer days of use. On a fixed-fee product, paying early raises your effective rate; it never lowers your cost. Second, Shopify's own example behaves the same way. The $13,000 fee on $100,000 is about 27% a year if it takes eleven months to repay and closer to 99% if a holiday rush clears it in three, on the amortizing basis. Shopify's example calls it a 13% fee. Both are true. Only one is a rate.

5. What SBA and working capital loans look like beside it

An SBA 7(a) loan is the reference point because its pricing is public and capped. The SBA limits variable rates to the prime rate plus 3% to 6.5% depending on loan size, with smaller loans carrying the higher cap. Prime was 7.00% as of October 20, 2026 (Federal Reserve H.15), which puts the ceilings between 10% and 13.5% a year. Fixed-rate caps run from prime plus 5% to prime plus 8% by size; in October 2026 that was 12% to 15%. A 7(a) loan for working capital or inventory can run up to ten years, and the interest shrinks as you pay the balance down, which is the opposite of a fixed fee.

For a seller whose problem is timing rather than a lump sum, the SBA's Working Capital Pilot is worth knowing about. Open through July 31, 2027 unless the SBA extends it, it backs monitored lines of credit up to $5 million for up to five years, with the amount you can draw tied to your receivables, your inventory, and your purchase orders, and a guaranty fee charged only for the years the line is open. That is a structure built for a business that buys stock, sells it over months, and buys again.

Now the honest part. SBA loans take weeks, not minutes. They want a tax return, financial statements, a personal credit file, and usually a personal guarantee. A business too young to have filed returns, or one with thin margins and no books, will often not qualify. Between the SBA and the dashboard sits a third category, the working capital loan or line from a non-bank lender, which is faster than the SBA and priced across a wide range. Some of those are real term loans. Some are advances in a loan's clothing. The tell is in the paperwork. If the cost is written as a fixed fee and the repayment as a percentage of sales, it is the third column, whatever the heading says.

Platform terms are the platforms' own published terms read October 20, 2026. SBA caps from sba.gov and the Federal Register. The working capital column is a description of a category, not any lender's offer.

6. "Business oriented" means the money fits how you earn

This is the idea the rest of the guide is built around. A financing structure is business oriented when its repayment shape matches the shape of the cash it was meant to create.

Picture a $50,000 inventory buy that will sell through over nine months. A term loan takes the same payment every month for the whole nine, so the stock pays for itself as it sells. A line of credit is paid down as the cash comes in and sits ready for the next buy. A daily-remittance advance sweeps hardest in the weeks right after the stock lands, when sales spike, and is often fully repaid before half the inventory is gone. The money it funded is still on the shelf, and the next buy needs a new advance. That is how sellers end up renewing every season and never getting off the treadmill.

Shapes only. Assumes even sell-through with a launch bump, a remittance that tracks sales, and level monthly loan payments. Your curve depends on your remittance rate and your season.

The same test catches the seasonal trap. A seller who takes a fixed-fee advance in October with a 30% checkpoint due in April is borrowing against the busiest quarter to repay through the slowest one. A line, drawn in September and paid down in January, follows the season instead of fighting it. And there is a structural point that has nothing to do with price. A platform advance puts your lender inside the payouts the platform controls, and the platform is already your processor and your landlord. A term loan or a line keeps the lender apart from both, which matters the day the platform suspends a listing or holds a payout.

7. When the platform offer is the right call

Sometimes it is, and saying so keeps the rest of this page honest. The platform offer tends to be the right call when most of these are true at once.

• The need is small beside a month's sales, and it is this week.
• There is no tax return yet, or the books are not in a state to show anyone.
• It is a one-off opportunity buy with a known sell-through, not a working capital gap that will come back next month.
• You have run the factor-to-APR math from section 4, with the method named, and you can live with the number.
• The payback fits inside the sell-through. If the stock sells in three months, a three-month payback does not strangle it.

If those hold, take it, and treat the fee as the price of speed. If two or three of them fail, the convenience is costing you more than it is worth, and it is time to put together a file.

8. The honest counterweights

SBA money is slow and paper-heavy. Weeks at best, and a personal guarantee is standard. For a seller who needs stock on the water by Friday, it is not an option this season, only the next one.

Many young online stores will not qualify for an SBA loan or a bank line, and no amount of structure talk changes that. The platform offer exists because it underwrites the one thing it can see, which is your sales. That is a real advantage for a young store.

A working capital loan from a non-bank lender is not automatically better. The category spans a wide range of prices, and some products in it are advances with a loan's heading. Read for the two tells, a fixed fee and a percentage of sales, and run the same math.

A UCC-1 can be filed under any of these. A lender filing a lien on your business assets is normal for an advance, a loan, and an SBA facility alike. The filing is public record, which is one reason your phone starts ringing after you take financing of any kind; we explain that on our privacy and disclosures page.

Tax treatment is not settled here. Whether the fee on an advance is deducted like interest, and how, is a question for your CPA on your own document. Our guide to business loan interest covers the loan side.

9. FAQ

Sources for this page (read October 20, 2026)