Stripe Capital review: how the offer, the fixed fee and repayment work in the UK

Stripe Capital is funding offered by Stripe to businesses already processing payments through it, repaid automatically from a share of subsequent Stripe sales. It is not a facility you apply for on the open market. Stripe's own page describes eligibility as being based on factors such as your payment volume and history on Stripe, with offers surfaced in the dashboard, and states that Capital has been offered initially to selected businesses in the UK. In practice that means the route in is an invitation rather than an application, which is the single thing most people searching for Stripe Capital want to know.

The mechanics are those of a merchant cash advance dressed in cleaner software. You receive a lump sum, you agree a single total to repay, and Stripe deducts a fixed percentage of your daily sales until the balance is cleared. Stripe describes payment as fully automated and adjusting to your daily sales, with funds typically arriving the next business day, one fixed fee that never changes, no compounding interest and no early payment fees.

For context, the wider UK market works the same way with different vocabulary. The deducted share, usually called the holdback, tends to sit between 5 and 20 per cent of takings, and pricing is quoted as a factor rate rather than an interest rate, commonly around 1.1 to 1.5. An advance is not a loan. It is the purchase of a slice of future receivables at a discount, and where it is provided to a limited company for business purposes it generally sits outside the Financial Conduct Authority's consumer credit rules. That last point cuts both ways: it is why the product can be arranged so quickly, and why the protections you might expect from consumer borrowing do not apply in the same form.

The product is built for businesses whose revenue genuinely runs through Stripe: online retailers, subscription businesses, software companies, marketplaces and service businesses that take card payments through a Stripe integration. If Stripe processes most of your income, the repayment mechanism tracks reality, the offer is sized against something meaningful, and the speed advantage is real. There is no accounts pack to assemble and no relationship manager to convince.

It suits businesses with variable or seasonal revenue better than a fixed instalment loan does, because a percentage of daily sales flexes with trade. It also suits a specific, bounded use of money: stock ahead of a peak, a marketing push with measurable return, a hire that produces revenue within months. The design assumes the money is recycled through sales quickly.

It fits badly in three cases. If Stripe is one of several payment channels and handles a minority of your revenue, the deduction draws from a narrow base and the balance clears far more slowly than an illustration implies, so work out Stripe's actual share of your takings before assuming a repayment period. If the money is for long term investment, a facility built to clear in months is the wrong shape. And if you are considering an advance to plug a structural cash flow gap rather than to fund growth, the product will make the problem arrive later and larger.

There is also a practical lock in. While a balance is outstanding, repayment depends on continuing to process through Stripe, which makes moving payment provider more complicated than it would otherwise be. If a migration was already on your list, decide on that before you take the funding.

Stripe's model is one fixed fee, set at the outset, which never changes and is paid down over time. There are no compounding interest charges and no early payment fees. That is genuinely clearer than facilities that layer arrangement, servicing and default charges on top of a headline rate, and it means the total you will pay is knowable on day one.

Stripe does show illustrative examples on its Capital page, including a fee of £1,500 on a £15,000 advance, £2,000 on £20,000 and £2,500 on £25,000, alongside repayment percentages such as 9, 12 and 15 per cent of daily sales. Read those as illustrations, not as a price list. They are there to demonstrate the shape of the product, and the fee and percentage on your own offer are generated from your Stripe history. What the examples do usefully show is the relationship between the two variables: a higher percentage of daily sales clears the balance faster, and the fee generally reflects the expected repayment period.

The critical consequence of a fixed fee is one that catches people out. Because the total repayable does not change, repaying early is free but not cheaper. Clearing a fixed fee advance in four months rather than nine means paying the same amount over a shorter period, which raises the effective annual cost considerably. This is exactly why a factor rate or fixed fee cannot be compared with a bank loan's APR by eye. Our guide to what a factor rate is works through the arithmetic, and the merchant cash advance calculator converts a quote into a total repayable and a realistic duration so two offers can be judged on the same basis.

The nearest equivalent is PayPal Working Capital, which is built on almost identical logic: eligibility from platform history, one fixed fee, repayment as a chosen percentage of platform sales. PayPal publishes firmer eligibility criteria for the UK, including a minimum account age and a minimum level of annual PayPal sales, whereas Stripe frames eligibility more loosely around payment volume and history. Which one is open to you is usually decided by where your sales already sit. If both are available, compare the total repayable and the deduction percentage on the actual offers rather than the brands.

Against a terminal based advance from a provider such as 365 Business Finance or Capify, the trade offs are clearer. An independent provider can size an advance against all of your card income rather than one platform, and you can talk to someone about whether a term loan would suit you better. A platform advance wins decisively on speed and on the absence of paperwork, but the offer is take it or leave it.

If your revenue is split across channels, or if you are not yet convinced an advance is the right instrument at all, our comparison of the best merchant cash advance providers in the UK and our page on alternatives to a merchant cash advance are the more useful starting points.

Pull out four numbers: the amount advanced, the total repayable in pounds, the percentage of daily sales being deducted, and Stripe's share of your total revenue. The fourth is the one people skip, and it is what determines whether the illustrated repayment period bears any relation to your business.

Then run the deduction against your weakest recent trading month rather than your strongest, and check what the business has left to operate on. Ask whether any minimum repayment applies over a set period, because several providers in this market impose a floor that only becomes visible when trade slows. Confirm who the credit agreement is with and whether any personal guarantee is involved, since an unsecured facility to a company can still create director level exposure.

Stripe's own description of the product, including its illustrative examples, is on its Capital page. Availability in the UK, eligibility criteria, fees and repayment percentages are set by Stripe and change from time to time, so confirm the live terms in your own dashboard before you accept rather than relying on any third party summary, this one included.