PayPal Working Capital: The ideal loan solution for small growing businesses

For every business out there, there will come a time a loan will be a lifesaver. And for small growing businesses, PayPal Working Capital loans turn out to be one of the best solutions out there.

PayPal is far more than just a money transfer service as many might think. Besides letting its users send and receive money online conveniently, PayPal offers financial aid by letting eligible customers borrow money from the platform to use for their business activities.

PayPal Working Capital loan and the PayPal Business Loan

PayPal Working Capital and Business Loans can help low-revenue business owners access financing.

PayPal Working Capital is a good fit for new or relatively small businesses with inconsistent cash flow — you can qualify with just three months of PayPal account history and $15,000 in annual sales. While this funding can be expensive, it could be helpful if you need working capital to float you through seasonal lulls or to help you cover a small expansion, like buying materials.

The PayPal Business Loan is better for larger businesses with more robust cash flow, as you’ll need annual revenue of at least $33,300 to qualify. This loan could be helpful if you need quick financing to get you through a short-lived slump — just make sure you’re confident that your sales will recover so you can keep up with weekly repayments.

PayPal Working Capital

This PayPal service is fast funding with payments that flex with your sales A business loan is based on their PayPal account history and they can repay with a share of their PayPal sales.

The service is good to go for as it offers competitively-priced small business loans from $1,000 to $150,000 for first-time borrowers and up to $250,000 for repeat borrowers.

Key features or aspects of the service

Payment Flexibility: You choose a share of your sales to automatically deduct as payments, so managing your cash flow is easier with a minimum payment requirement. That’s the Repayment percentage chosen prior to loan funding and applied to each PayPal sale. The minimum payment is required every 90 days. See Terms and Conditions for details.

No surprise fees: Don’t worry about periodic interest or hidden fees—you pay just one competitively-priced fixed fee.

No credit check: Your loan is based primarily on your PayPal account history, meaning no credit check is required—and it doesn’t affect your credit score.

Funding in minutes: There’s no time-consuming application or check of your financial history. Approved loans are funded in minutes.

How the service works

PayPal Working Capital is a business loan with one affordable, fixed fee. You repay the loan and fee with a percentage of your PayPal sales (minimum payment required every 90 days). There are no periodic interest charges, monthly bills, late fees, pre-payment fees, penalty fees, or any other fees.

The process is easy:

  • Select your loan amount. The maximum loan amount depends on your PayPal account history.
  • Choose the percentage of your PayPal sales that will go toward repaying your loan and fee.
  • If approved, receive the funds in your PayPal account within minutes.
  • Repay automatically with a percentage of each sale until your balance is paid in full (minimum payment required every 90 days). You can also make manual payments or even pay the loan in full with no early repayment fee, using your PayPal balance or a linked bank account.

The PayPal Working Capital requirements

Minimum requirements to apply:

  • Your business has had a PayPal Business or Premier account for 90 days or more
  • You process at least $20,000 in annual PayPal sales if you have a Premier account, or at least $15,000 in annual PayPal sales if you have a PayPal Business account
  • Pay off any existing PayPal Working Capital loan

PayPal Business Loan Requirements

  • FICO score of at least 580.
  • At least nine months in business.
  • Annual revenue of at least $33,300.
  • Personal guarantee.

Applying for a PayPal Working Capital business loan

The application process isn’t any complicated but very simple and flexible funding and can be done in minutes. Here are the steps to follow;

Step 1 – Apply

Complete the short application and get an answer within minutes. No credit check and no extensive documentation are required.

Step 2 – Customize

Once approved, review the fixed fee upfront, select your loan amount and percentage of each PayPal sale for repayment, and receive your funds within minutes.

Step 3 – Repay

Automatically pay back your loan with a share of each PayPal sale. No sales mean no payment necessary, but to keep your loan in good standing, you’ll need to make a payment every 90 days.

PayPal Working Capital Frequently Asked Questions

Who Is eligible to apply for PayPal Working Capital?*

To be eligible to apply for PayPal Working Capital, you must:

  • Have a PayPal Business or Premier account for 90 days or more
  • The process at least $20,000 in annual PayPal sales if you have a Premier account or at least $15,000 in annual PayPal sales if you have a Business PayPal account.
  • Pay off any existing PayPal Working Capital loan

*PayPal Working Capital is currently unavailable to merchants located in North Dakota, South Dakota, and Virginia. State eligibility is subject to change. Please continue to check back to see if businesses located in your state become eligible for PayPal Working Capital.

Are There Any Required Documents To Apply?

For many merchants, all you need is some basic info about your business and yourself, as the authorized representative on the account.

However, for certain business types, you will want to have additional information on hand. You will need the contact details, birth dates, and Social Security numbers of your primary business owners and business management, as well. These people won’t have access to the account (unless you authorize them on your PayPal account), and the information won’t be used for a credit check.

What fees do I have to pay with PayPal Working Capital?

Unlike traditional loans, PayPal Working Capital charges a single, fixed fee that you’ll know before you sign up. No periodic interest, no hidden fees, and no late fees.

Can I get more than one PayPal Working Capital loan at a time?

PayPal Working Capital loans are issued one at a time. You can apply after paying off one loan to get another one – many merchants do. Keep in mind that future applications are subject to approval.

Some demerits of these PayPal services

Repayment schedule may be aggressive

For PayPal Business Loans, the lender will automatically withdraw the same amount from your business checking account every week, regardless of whether your sales are up or down. Frequent repayments can be risky if you have to borrow additional funds to keep up.

For PayPal Working Capital loans, your repayment percentage is fixed for the life of the loan. If you start out with an aggressive repayment plan and then realize you’d prefer to put the cash toward other expenses, you can’t make changes.

Fees may be confusing

Instead of a traditional interest rate, PayPal Working Capital and Business Loans both charge a fee spread out over the life of the loan. In practice, this isn’t that different from making loan payments that include both principal and interest. But it might make it hard to compare the costs of a PayPal business loan with other products.

No benefit to early repayments

PayPal Working Capital charges a fixed fee instead of an interest rate. If you pay off your loan early, you’ll still owe that whole fee — so there are no savings associated with paying ahead. That said, there’s no early repayment fee, either.

PayPal Business Loans also come with a fixed loan fee. They’re repaid on a schedule that you agree to when you take out the loan, which you can’t modify.

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