Square Loans vs. Shopify Capital vs. PayPal Working Capital: POS Funding Compared (2026)

Your payment processor already knows exactly how much money you make — down to the day. So instead of asking for your tax returns, it just offers you money and takes a percentage of your daily sales until it's repaid. Square, Shopify, and PayPal all run versions of this model, and for merchants who live inside one of those ecosystems, platform funding is often the fastest dollar they'll ever borrow.

But the three products are not interchangeable, and the "comparison" most merchants need isn't between the platforms — it's between their platform and the open market. Here's the broker's honest read: what each one actually costs, who each one fits, and when to walk away from your own processor.

The head-to-head table

Figures below are summarized from each provider's own published materials (Square's loan pages, Shopify's Capital help docs, PayPal's Working Capital terms) and 2026 third-party reviews. Platform lenders change terms quietly and offers are personalized — treat this as the honest starting grid, then verify your actual offer.

Square Loans: the brick-and-mortar favorite

Square Loans (formerly Square Capital) is built for the coffee shop, salon, or retail counter already running Square's POS. Loans run $2,000–$250,000 per Square's own published page, carry one fixed loan fee — no ongoing interest, no late fees, and the fee never changes no matter how fast or slow you repay — and repay automatically as a percentage of your daily Square card sales. If you're approved, funds land as soon as the next business day.

The structure has a hard backstop: a minimum payment of 1/18th of the initial balance every 60 days, with the full balance due within 18 months. Miss the minimums and Square can debit your Square balance or linked bank account. Eligibility is the catch: offers are generated from your processing history — Square's own materials describe the program as open to businesses with about a year of history and roughly $250K+ in annual sales — and there's no application to submit, just an offer to wait for. Third-party reviews report no credit check and no personal guarantee at $250,000 or less.

Shopify Capital: the biggest check of the three

Shopify Capital is the heavyweight: up to $2 million for merchants with real sales volume, issued by WebBank in the US. Shopify's own help documentation (read September 2026) describes two pricing structures: a monthly-fee loan — Shopify's own example is a $100,000 loan at a $1,400 monthly fee, costing $4,200 over 3 months or $15,400 over 11 — and a fixed-fee loan — their example: $100,000 at a 13% factor rate costs $13,000 total however quickly it's repaid. Repayment is a fixed percentage of daily sales with milestones: 30% of the loan due by month 6, 60% by month 12, inside an 18-month maximum term.

The honest asterisk: Shopify publishes no credit check and no guarantors, and eligibility is a machine-learning model weighing sales volume, sales-day frequency, disputes, and customer engagement — with at least 90 days selling on Shopify. But invite-only means you can't apply your way in, and the factor-rate structure means you have to convert to an implied APR yourself before comparing it to anything else. As one 2026 review put it: factor 1.10–1.15 on Shopify Capital works out to roughly 25–35% effective APR over typical terms.

PayPal Working Capital: the service-business play

PayPal Working Capital fits a different merchant: the consultant, agency, wholesaler, or online seller whose revenue actually flows through PayPal. Per PayPal's published terms: up to $250,000 ($400,000 for repeat borrowers), a single fixed fee disclosed up front, and repayment as a fixed percentage of your daily PayPal sales. Eligibility is evaluated on your PayPal transaction history — the more consistent the volume, the bigger the offer.

The limitation is the tether: your funding amount and repayment are both tied to PayPal volume. If you migrate your checkout to Stripe or direct invoicing mid-repayment, the mechanics get awkward. For businesses that live in PayPal, it's simple and fast; for businesses merely passing through, it's a short leash.

Honorable mention: Stripe Capital

Stripe Capital rounds out the platform set: a flat fee with repayment as a percentage of Stripe sales, offered to businesses processing on Stripe. Same family as the other three — fast, sales-based, invitation-driven — and worth naming because so many online sellers process on Stripe without knowing their processor is also a lender.

The verdict: you're really comparing ecosystems, not lenders

Here's the thing nobody's comparison table says: you can't really "choose" between these three. You get the funding product of the platform you already run on. The Square seller gets Square Loans; the Shopify store gets Shopify Capital; the PayPal merchant gets PayPal Working Capital. Switching processors to chase a funding product is backwards — the processing relationship is the business; the loan is a side effect.

So the real comparison is: your platform's offer vs. the open market. Platform funding is fast and convenient, but it prices like an MCA — flat fees and factor rates that convert to high implied APRs. An independent broker can take the same 3 months of bank statements and shop 75+ lenders for a term loan or revenue-based product that funds just as fast and often costs far less. Take the platform offer if speed and convenience win; take the open-market route if cost wins.

The broker's note: when neither your platform nor a competitor fits

Under a year in business, thin processing history, or sales spread across three platforms with no single one dominant — platform lenders shrug at those files. That's not the end of the search. A broker reads the actual file — all of the revenue, not just one platform's slice — and shops it where the full picture counts. If you want the comparison done by someone who doesn't work for any of these platforms, start an application — it takes about 5 minutes and does not affect your credit score.

How we compared

Figures in this guide are summarized from each provider's own published pages and 2026 third-party reviews (Finder, OnRamp Funds, Luca AI), paraphrased in our own words. Platform lenders change terms without notice, offers are personalized, and invitation-only means published minimums are eligibility signals, not guarantees. Always verify the exact terms on the offer you receive before signing. We have no partnership, referral, or advertising relationship with Square, Shopify, PayPal, or Stripe, and none of them reviewed this page.

Frequently asked questions

Which platform lender offers the largest amount?

Shopify Capital, by far: up to $2 million. Square Loans publishes $2,000–$250,000, and PayPal Working Capital reaches $250,000 ($400,000 for repeat borrowers).

Can I apply for Square Loans or Shopify Capital whenever I want?

No — both are invitation-only. Offers are generated from your processing history by the platform's own models. There is no application to submit; you wait for (and qualify for) an offer.

Do platform lenders check my credit?

Square and Shopify advertise no credit checks for their funding products — eligibility is driven by your sales and processing history instead. That makes them accessible to merchants with bruised credit, but it doesn't make them cheap.

How do I compare a factor-rate offer to a bank loan?

Convert the fee to an implied APR: divide the fee by the average outstanding balance, then annualize. A "13% factor" repaid over 6 months is a much higher APR than 13% — our MCA offer-comparison guide walks through the exact math.

What happens if my sales drop mid-repayment?

The daily percentage drops with your sales — that's the built-in flexibility. But most of these products have backstops: minimum payments every 60 days (Square), milestone requirements (Shopify's 30%-by-month-6), or a hard maturity date when the full balance comes due regardless.

Should I take my platform's offer or shop the open market?

Take the platform offer when speed and zero paperwork win. Shop the open market when cost wins — a broker-shopped term loan or revenue-based product often beats platform pricing for the same file. The right move is comparing the total payback dollars on both, side by side.