Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses or reviews expressed in this article are those of the author alone and have not been approved or endorsed by any partner.
PayPal Working Capital Pros
PayPal Working Capital Cons
PayPal Working Capital Features
PayPal working capital loans range from $1,000 to $150,000, with repeat customers being eligible for loans up to $200,000. The loan is repaid with a percentage of your PayPal sales, and PayPal does not charge any prepayment fees, penalty fees, or other fees.
To be eligible for a PayPal working capital loan, borrowers must have at least $15,000 in annual sales with a Business PayPal account or at least $20,000 in annual sales with a Premier account. The account must be open for 90 days or more, and any existing PayPal working capital loan must be paid off.
PayPal small business loans are aimed at those looking for short-term lending, and most will see term limits of 18 months. In addition, a minimum payment must be made at least every 90 days.
Business Loans
In addition to a working capital loan, PayPal also offers short-term small business loans. A business loan differs from a working capital loan in that borrowers receive a lump sum of money repaid on a weekly basis. These loans come with set terms and fixed payments, meaning borrowers are responsible for the payment regardless of sales.
To apply, simply fill out a short, 10-minute questionnaire to see if you’re eligible. This is the most popular option on the platform and anyone can apply. One thing to watch out for, though, is that payments won’t be monthly. You’ll be expected to make repayments on a weekly basis, so make sure you have the cash flow to cover it.
In addition, you should keep in mind that interest rates could be quite high, depending on how much you borrow and for how long. A credit check is also required with this type of funding.
| Term length | 13 - 52 weeks |
| Repayment period | Weekly |
| APR range | 12.5% - 125% |
| Min - Max amount | $5,000 - $100,000 |
Working Capital Loans
PayPal working capital loans are only available to PayPal business customers and work a little bit like a merchant cash advance. Users can borrow against 35% of their total annual sales made via PayPal; and borrowing amounts range from $1,000 to $150,000 for first-time borrowers. You can choose your repayment percentage to be deducted directly from your sales, which range between 10% - 30%.
Since you get to choose the repayment levels, it can become quite complicated to work out your total interest and term lengths, and it’s recommended you try the PayPal working capital calculator to get an idea of what you’ll pay. This is a pretty nifty tool and it’s great to see such a high level of transparency at PayPal.
Simply enter your annual sales and the amount you’d like to borrow into the calculator. You’ll be given a selection of repayment percentages and fees. Bear in mind this could be different from your final offer.
| Term length | Up to 18 months |
| Repayment period | Minimum payment required every 90 days |
| APR range | Not disclosed |
| Min - Max amount | 35% of total sales value up to $150,000 |
PayPal Working Capital Interest Rates and Fees
One of the benefits of taking out a loan with PayPal is that you won’t pay much in terms of fees. PayPal charges just one competitively-priced fixed fee. There are no administration or origination costs, and the only charge you can expect to pay is if PayPal is unable to take payment. Since working capital loans are deducted directly from your PayPal sales, you don’t need to worry about late payment fees, either, since your costs will always be a percentage of that day’s sales.
Small Business Loan
| Origination fees | Zero |
| Prepayment fees | Zero |
| Late payment fees | $20 returned payment fee |
| Maintenance fees | Zero |
| Interest rates | 12.5% - 125% |
Working Capital Loan
| Origination fees | Zero |
| Prepayment fees | Zero |
| Late payment fees | Zero |
| Maintenance fees | Zero |
| Interest rates | Not disclosed |
How to Qualify for a PayPal Working Capital Loan
The qualification requirements for PayPal small business loans are surprisingly lenient and acceptance rates are high. Plus, it’s a good option for those with low credit. The PayPal working capital loan does not pull your credit, and the small business loan requires a minimum score of just 580.
Small Business Loan
| Minimum credit score | 580+ |
| Minimum annual revenue | $33,000 |
| Minimum time in business | At least nine months in business |
Working Capital Loan
| Minimum credit score | Credit not pulled |
| Minimum annual revenue | $15,000 in annual sales with a Business PayPal account $20,000 in annual sales with a Premier account |
| Minimum time in business | Have a PayPal account for at least 90 days |
| Additional criteria | You must pay off any existing PayPal working capital loans |
The PayPal Working Capital Application Process
PayPal has one of the fastest application processes and funding times we’ve seen in the online lending community. You start by filling out a questionnaire that takes no more than 10 minutes to complete. You’ll get a near-instant response on your eligibility before moving on to choose your terms and borrowing amount.
At this stage, you’ll be able to see how much the loan will cost and be asked to accept or reject the offer. If approved, you’ll see the funds in your account within minutes.
Repayments are made automatically based on a percentage of each sale until the loan is paid off. A minimum payment is required every 90 days. You’re also able to pay the loan off early with no additional fees.
How PayPal Determines the Loan Amount
If you use PayPal to process the majority of your daily payments, your daily sales figures will primarily determine how much you can borrow. This is because it gives the platform a very clear idea of how much you’ll be able to repay. For those that don’t process payments via PayPal, you’ll apply for PayPal’s standard small business loan. In this case, you’ll be assessed on your credit score and financial statements of your business.
Most people have heard of PayPal. This eCommerce giant now employs more than 23,000 people globally and has an estimated net worth of around $45 billion. Its loan business is growing in strength each year and is shaping up to be one of the most secure lenders on the market.
PayPal Working Capital Customer Support
As a long-established and reputable lender, you’ll find an extensive FAQ page to answer any initial queries you might have. PayPal backs this up with a series of useful articles and guides on its business resources center page.
If you want to speak to a service agent or raise a specific query, it can be a little confusing as to where to go at first. All PayPal customer service is integrated, so there’s no specific helpline to talk to a loan advisor. That being said, you can still get in touch over the phone, via live chat or via email, and your query will be directed to the relevant department.
In addition, you can turn to the customer forum for answers where thousands of topics have been covered by community members.
Perks and Bonuses
Flexibility
PayPal working capital offers flexible repayment terms based on a percentage of your sales. You decide this percentage, but a minimum payment must be made every 90 days. The minimum payment must be at least 5-10% of the total loan amount, which is something to keep in mind if you’re using this loan to cover expenses during a slow season.
Transparency
PayPal offers a robust FAQ page on their working capital loans only. This page covers everything from fees and repayments to payment logistics and applying for another loan. PayPal also gives you your final loan amount and terms before you sign, allowing you to fully review the loan in its entirety before making a final decision.
Technology
PayPal has been providing businesses access to funding since 2013. They’re app is incredibly user-friendly and allows you to manage your day-to-day finances (including making payments, collecting payments, and managing your business loans) at any time and from anywhere.
Final Thoughts
PayPal working capital loans are an excellent choice for those that need fast access to funding or have poor credit. It operates one of the most streamlined application processes and offers existing PayPal customers an easy way to access funding that’s suitable for their business. Whether you need to pay for marketing expenses, purchase more inventory, or are looking to hire more employees, a working capital loan from PayPal can help you meet your small business financing needs.
