How Capital works

The process of offering business financing through Adyen Capital consists of several stages. The implementation may differ based on whether you choose to integrate directly with Adyen's APIs or use our prebuilt UI components.

1. You request the necessary capabilities for your user, after which Adyen conducts a risk assessment of their account.
2. You present pre-qualified grant offers to your user.
3. Your user selects a grant offer and agrees to Adyen's Terms of Service.
4. The grant amount is disbursed to the user's balance account.
5. The user repays the grant.

The following sections provide more detailed information about each of these stages.

User capabilities and risk assessment

Adyen Capital requires the account holder associated with your user to have specific capabilities. In most cases, Adyen automatically configures and requests the necessary capabilities for your business during the design phase.

After the necessary capabilities are requested, Adyen begins assessing risks based on the user's payments data. This risk assessment determines the grant offers that are available to your users.

Grant offers

Based on the results of the risk assessment, Adyen proactively generates grant offers for your users. Each grant offer includes the following information:

• The grant amount available to the user.
• The fee associated with the grant.
• The repayment terms for the grant.

Based on the risk assessment, Adyen generates grant offers as follows:

• If you are using an API-only integration, Adyen generates a maximum of three grant offers that you can present to your user. Each offer includes different grant amounts.
• If you are using UI components, Adyen determines a maximum grant amount that your user qualifies for. Your user can select any grant amount that does not exceed the maximum grant amount.

Grant offers are generated only for users who meet our eligibility criteria. To learn more about these criteria, reach out to your Adyen contact.

Selecting a grant offer and signing Terms of Service

Users must choose the grant offer they want. After a user selects a grant offer, you must provide them with the following information:

• The terms of the selected grant offer.
• The Terms of Service related to the Capital product.

Depending on your implementation:

• If you are using an API-only implementation, you must generate a Terms of Service document, present it to the user, and request their acceptance.
• If you are using UI components, the user will complete this step as part of the prebuilt user flow.

Disbursing the grant

After the user signs the Terms of Service, the necessary capabilities become enabled for them. You can then proceed to disburse the grant to your user.

The amount that you disburse to the user is called a disbursement. The disbursement is assigned a unique identifier that enables you to:

• Manage disbursement configuration.
• Track the disbursement data, including repayment progress and outstanding amounts.

You can configure the grant to be disbursed to the user's balance account or their transfer instrument (a bank account verified by Adyen). You can specify the desired destination of the disbursement in your API request to configure a grant:

• The grant amount is initially disbursed to the balance account linked to the account holder of your user.
• After the initial disbursement has settled, you can instruct Adyen to transfer the grant amount to the user's transfer instrument by indicating this in the same API request.

Repaying the grant

Adyen provides two options for repaying grants:

1. Regular (scheduled) repayments: Adyen automatically reserves and deducts a fixed percentage from each incoming capture to cover the repayment. This is the default option and is managed entirely by Adyen.

2. Unscheduled repayments: This option allows users to make early repayments or to catch up on missed payments. It requires additional action on your part.

Both repayment options are available for prebuilt components and API-only integrations.

Regular repayments

With regular repayments, a fixed percentage is reserved from the net captured volume. The net captured volume is calculated as the amount of funds captured minus the amount refunded or charged back. At the end of each sales day, we deduct the reserved funds from your user's balance account as part of the repayment process.

If the net captured volume for a specific day is negative, we release the reserved amount for that day. On these days, we do not trigger any repayments due to the release.

To monitor repayments, we calculate a threshold amount. This threshold amount represents the minimum repayment amount that we expect the user to pay each 30-day period to ensure that the entire grant amount is repaid within the maximum repayment term. If the total repayment within a 30-day period falls below this threshold, we may take additional steps to ensure timely repayment.

Unscheduled repayments

Users can make unscheduled payments to repay their grant using the dedicated bank account details (for example, IBAN) assigned to each disbursement:

• With the API-only implementation, you can retrieve these bank account details by making an API call. Then, you can share the information with your users.
• With the UI components, your users can select the Send repayment button for their active grant to view and copy the necessary bank account details for initiating a bank transfer. This feature is available starting from library version 1.4.0.

After you provide the bank details to your users, they can transfer the repayment funds from their verified bank accounts (transfer instrument). Repayments can only be sent from the user's transfer instrument.