Cash flow

Borrow to buy inventory, or order less

A cash gap has two fixes, and the pages that sell financing mention one of them. Which fix is right depends on why the gap is there, and the order comes first either way.

Marcus VolstedCo-founder, Restocio Published 10 October 202614 min read

Borrow when the cash gap is a one-off and the order behind it is already the right size. Shrink the order when the same gap comes back every cycle, because a loan that funds a coverage habit pays a fee, cycle after cycle, for stock you could have chosen not to hold. Most real cases are some of both: cut what can be cut, then borrow only the remainder of the burst month, never the amount you were offered. Why a profitable importer has no cash and how much the next container needs, and when each have their own page. This one sits between them. It is about whether to fill that hole with borrowed money, and how much.

None of it is financial advice, and no interest rate or fee appears on this page, because every lender's cost differs by merchant and by month and this page cannot quote yours. What it can do is separate two decisions that the financing pages fold into one: how big the order should be, and how to pay for it.

The question the lenders leave out

Search for whether to borrow for stock and the answers are written by people who lend money. That is not a complaint. It is a reason to notice the shape of the advice. Every page we opened on 1 October 2026, lender articles and a Shopify community thread among them, takes the order as given and asks only how to pay for it. The purchase amount arrives fully formed, and the only variable left is the loan.

For an importer the order is the larger decision. Its size came from a coverage choice, a supplier minimum, a guess about a season, or a habit inherited from whoever placed the first order, and none of those is fixed. The cash gap is the order times the timing, so before deciding how to fund the number it is worth ten minutes on whether the number is right. A lender will not ask, because a smaller order is a smaller loan.

Is the gap a one-off or every cycle?

This split decides most of it, and your own order history answers it.

A one-off gap has a date and a reason. A step up in demand that makes the next order half again bigger than the last. A Black Friday build whose bill lands in January. A double order placed before Chinese New Year so the shelf survives the factory shutdown. A supplier minimum that lifts one order above what you need. In each case the burst passes, the following cycle is ordinary, and the goods bought in the burst sell through and bring their cash back.

The structural kind has no date. The burst month exceeds what sales refill, and does so on every order whether or not anything unusual happened. Growth causes it, since cash goes out at tomorrow's sales rate and comes back at today's, and that mechanism is on the page about being profitable with no cash. A coverage habit causes it too: each order buys more days of sales than the cash cycle can carry, so the bank is short by about the same amount every time, and nobody decided it should be.

The gap	What borrowing does	What shrinking the order does
One-off, with a date and a reason	Bridges it. The burst passes, the goods sell, and the stock they bought clears the borrowing.	Gives up part of the reason for the burst: the season, the shutdown cover, the growth step.
Structural, from a coverage habit	Funds the habit at a fee, and the same gap is back next cycle with a remittance on top of it.	Removes it. Shorter cover on the products holding the most days of stock frees cash on every cycle at no fee.
Structural, from growth	Funds the growth. Legitimate, and it repeats for as long as the growth does.	Slows the growth to what the cash cycle can carry. Also legitimate, and a choice rather than a failure.
Fixed by a supplier minimum	Pays for units you did not need in order to get the ones you did.	Not available, unless the minimum can be negotiated or the line skipped for a cycle.

Read your last four or five order cycles against the first column. If the short month is on every one of them and nothing unusual explains it, borrowing is a way of not deciding. If it is on one of them, with a reason you can name, borrowing is a tool, and the rest of this page is about using it in the right size.

What shrinking the order changes

What shrinking does to the burst is easier to see on the numbers from the container page than in the abstract. There, a product selling 25 a day is ordered 90 days at a time, 2,250 units, on 30 per cent down and the rest before loading. In the burst month, when the next order's deposit and balance land beside this order's freight bill, 21,600 falls due inside 30 days. Sales return 7,200 of it in the same month, counting only the cost share, so the bank carries 14,400.

Cut the next order to 60 days of cover, 1,500 units, and its deposit falls from 5,400 to 3,600 and its balance from 12,600 to 8,400. The burst month drops from 21,600 to 15,600 and the bank's share from 14,400 to 8,400. What you gave up is 30 days of stock, so the order after that goes in on day 150 instead of day 180, and the quiet stretch that refills the account runs 29 days instead of 59.

So the bank's share falls by more than a third and the next peak arrives a month sooner, and smaller. The 8,400 is the changeover month, which still carries the old order's 3,600 freight bill. Once every order is 60 days, 4,800 in the bank on the order day gets through every payment, a third of the 14,400 the 90-day habit needs. Shrinking does not cut what you spend on goods across a year, because the shelf still has to hold what customers buy. It turns one large lump into smaller and more frequent ones. Freight per unit can rise on a smaller shipment, and a per-order minimum can put a floor under how far the cut can go. Those are the honest costs of the free option.

Which lines to shrink is worked out on the profitable-but-no-cash page and is not repeated here. Rank by days of stock and cut cover at the top of that list, leaving the A-products their buffers. An even cut across the catalogue starves the winners to pay for the hoarding, which turns a cash problem into a revenue problem.

What borrowing changes

Borrowing leaves the order alone and moves the cost into the months after the burst. How it moves depends on the structure you are offered, and the structure matters more than the headline amount.

Shopify Capital is the example worth walking through, because it is the offer a Shopify merchant is most likely to meet inside the admin and because Shopify documents it in public. Its product page, read on 1 October 2026, says you pay it back "with a fixed percentage of your store's daily sales", more when sales are strong and less when they are slow, and with "no compounding interest". Its glossary calls that percentage the remittance rate and defines the total to remit as the amount received multiplied by a factor rate. Neither page prints a rate. Nor does this one, and Restocio is an independent app with no connection to Shopify Capital.

Two sentences from the United States help page, read the same day, decide how the amount should be sized. On a fixed-fee loan "the fee is fixed no matter how long it takes you to repay your loan", and "even if you pay off your entire balance, the cost of funds remains the same". The cost is a function of how much you take, not of how long you keep it. On one such offer, borrowing 14,400 to bridge a 30-day burst carries the same fee as borrowing 14,400 for a year, and taking the offer's full amount when half of it would have covered the gap buys nothing with the other half except fee. The same page describes a monthly-fee loan, charged per month, where repaying faster does reduce the cost. The two structures reward opposite behaviour, so read which one is in front of you before anything else. Other countries' pages and other lenders differ, and the point is to check yours rather than trust this summary of one.

The remittance is the part the container page's arithmetic does not see. In that example the quiet stretch refills the account at 240 a day of cost share. A remittance comes off the top of each sale before the cost share or anything else is counted, so the refill runs slower by whatever the rate takes and the stretch has to be longer to do the same work. Two more lines from the US page belong here. "No payment is taken on days when there are no sales associated with your Shopify account", which suits lumpy sales, and "the minimum repayments are 30% of the total loan by the 6-month mark and 60% of the total payment amount by the 12-month mark", which means the pay-less-when-slow flexibility has a floor under it.

Borrow or shrink, side by side

	Borrow to cover the full order	Shrink the order to the cash
Cash out in the burst month	Unchanged. The loan covers the bank's share	Falls by the deposit and balance on the units you drop
What it costs	A fee or factor on the amount taken, set by the offer	More freight per unit on a smaller shipment, and more orders a year to place and receive
The months after	A share of every sale leaves before the refill is counted	The next order's deposit arrives sooner
Stockout risk	Unchanged. The shelf gets what the plan said	Flat if the cut lands on the lines holding the most days of stock, up if it lands on the lines carrying the revenue
Growth ceiling	Lifted, for as long as the borrowing continues	Set by what the cash cycle refills
If the order was too big	You have financed the mistake	You have corrected it
If the order was right	You have kept the season	You have given part of it up

Those last two rows are the whole argument. Borrowing amplifies whatever the order already was. If the quantity was honest, borrowing protects it. If it was a habit or a guess, borrowing fixes the guess in place and charges for it. That is why the order comes first, and why the sizing below runs in the order it does.

How much to borrow, if you borrow

Size it to the burst month after shrinking, not to the offer, and get there in a sequence that tends to make the loan smaller at each stage.

Start with the cost prices the plan was priced on. A plan approved on a cost that leaves out freight is short before any loan is sized, and short in the direction of the imported lines, which is its own page. A loan sized to an understated total runs out at the balance payment.

Then shrink what can be shrunk, on the days-of-stock ranking above, and what is left is the honest order. Run the burst-month arithmetic on it, deposit plus balance plus any freight bill landing in the same 30 days, minus the cost share sales return in that month, and the remainder is the bank's share.

Borrow that remainder, if you borrow. Shopify's help centre says offers are made "based on the store's location, history, use and interaction with the Shopify platform". Nothing in that list is your purchase plan, so the offer amount is a statement about you rather than about the order, and there is no reason the two should match. On a fixed-fee structure, every unit of the offer above the remainder is fee paid for money you did not need.

Where Shopify Capital is not on offer

Shopify's help centre page for Shopify Capital, read on 1 October 2026, lists it as available in Australia, Canada, France, Germany, Ireland, the Netherlands, Spain, the United Kingdom and the United States. Its product page, read the same day, names only four of those, the United States, Canada, the United Kingdom and Australia, so Shopify's own two lists disagree. Sweden, Denmark, Norway and Finland are on neither. A Nordic store, which is Restocio's home market, is not shown the offer at all, and this page is not going to name the lenders who fill that gap or guess at what they charge. The decision is the same in the Nordics. Only the borrowing half has to be sourced elsewhere, with its cost read off an offer in front of you rather than off any page, this one included.

What Restocio shows, and what it cannot

The number this decision needs first is what is still owed on orders already placed, and that one is on screen. The Dashboard carries a card called Cash in stock on the way. Unfolded, it shows open orders at cost, what has been recorded as paid and what is still to pay, with the still-to-pay figure broken out by the month each order is expected to arrive. It reads the payments you record against each purchase order, so if none are recorded everything counts as still to pay, and the card says so. The Purchase Orders page shows the same figures as one quiet line.

Two limits sit beside that. The by-month view groups what is owed by expected arrival, and a balance is usually due before the goods ship, so it tells you which orders are still costing money rather than the day each payment falls. And nothing in the app knows your bank balance, or that a remittance is coming off your sales. It will not warn you that a burst lands in a month you cannot cover, and it never trims or hides a recommended line to fit a budget. Nor is there a what-if view that reruns the plan on a smaller amount. A cash limit on ordering and a cash-flow view of purchasing are on our public roadmap under consideration, which means we like them and have promised nothing. The shrink half of this page is a spreadsheet job run on the plan's total, and the borrow half is between you and a lender. The deadline and the quantity behind the plan are in the Shopify replenishment guide.

Common questions

Should I borrow to buy inventory, or just order less?

Work out first whether the cash gap is a one-off with a reason you can name, or a shortfall that returns every cycle. A one-off can be bridged by borrowing, once the order behind it has been checked. A gap that comes back every cycle usually comes from a coverage habit or from growth, and a loan taken against a habit pays a fee every cycle for stock you could choose not to hold. In most stores the answer is some of both, in that order: shrink what can be shrunk, then borrow the rest.

Is Shopify Capital available in Sweden, Denmark or Norway?

Not as of 1 October 2026. Shopify's help centre lists Shopify Capital as available in Australia, Canada, France, Germany, Ireland, the Netherlands, Spain, the United Kingdom and the United States. Its product page names only four of those, the United States, Canada, the United Kingdom and Australia. No Nordic country is on either list, so a store there has to fund a gap from other sources, and the cost of those is set by the lender's offer rather than by anything Shopify publishes.

How much should I borrow for an inventory order?

The bank's share of the burst month, worked out after the order has been checked and trimmed, not the amount a lender offers. Add the deposit, the balance and any freight bill landing in the same 30 days, subtract the cost share your sales return in that month, and what is left is the gap. On a fixed-fee structure the cost depends on the amount taken and not on how long you keep it, so any amount above the gap is fee paid for nothing.

Does paying off Shopify Capital early save money?

On a fixed-fee loan, no. Shopify's United States help page, read on 1 October 2026, says the fee is fixed no matter how long repayment takes and that paying off the whole balance leaves the cost of funds the same. On a monthly-fee loan the fee is charged per month, so there faster repayment does reduce it. Which structure you are offered, and what the equivalent is in your country, is on the offer itself.

Can Restocio tell me whether I can afford an order?

No. It shows what the plan costs at your registered purchase prices, and what is still to pay on orders already placed, by the month they are expected to arrive. It does not know your bank balance or any remittance coming off your sales. It never cuts a recommendation to a budget, and there is no view that reruns the plan on a smaller amount. Ordering within a cash limit and a cash-flow view of purchasing are on the public roadmap under consideration, not shipped.

Marcus Volsted

Co-founder, Restocio

Marcus co-founded Restocio and works on it daily with a Swedish importer who plans their purchasing in it every working day. Restocio is built in Sweden by two founders, one Swedish and one Danish, and Marcus is the Danish one. Why we are building it.