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PayPal Working Capital Review: Fast Funding Based on Sales

Small business loans help entrepreneurs pay for inventory, grow their businesses, cover day-to-day expenses, and more. If you receive payment via PayPal, a PayPal working capital loan can give you fast funding with flexible payments based on your sales.

PayPal working capital review
paypal business loan
4.0
Please Vote!
Min. Credit Score
Min. Credit Score 550+
Loan Amount
Loan Amount $5K- $500K
Loan Repayment
Loan Repayment 1 - 12 months
Anthony Edmundson
Freelance Content Writer

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

As the largest online payments platform in the world, it makes sense that PayPal would add a working capital business loan provision to its list of services. It has the capital to back up loans and already has a wealth of information on thousands of businesses via a record of PayPal transactions, making it easy for the platform to assess eligibility.

Paypal has created a surprisingly simple small business loan process, making it highly competitive with other online small business lenders. The product does not require a credit check and tends to cover short-term and emergency funding gaps. Read on to learn more about borrowing amounts, terms, and fees in this PayPal working capital review.

Summarized Ratings

This parameter considers borrowing/origination fees, prepayment fees, late payment fees, maintenance fees, and minimum/maximum interest rates. For each financing arrangement offered, each of these features was evaluated using the five-point scoring system. Then, the various scores were aggregated and averaged to establish an overall interest rates and fees score.

PayPal scores a respectable 3.5 on Interest Rates & Fees. This reflects the average of the following measures: 5.0 for no borrowing fees, 4.0 for no prepayment fees, 4.0 for below average late payment fees, 5.0 for no maintenance fees, 2.0 for a relatively high minimum interest rate, and 1.0 for a worst-in-class maximum interest rate.

PayPal Working Capital Reviews - What Others are Saying

It can be a little difficult to pin down exactly what customers are saying about PayPal small business loans because aggregate review sites like Trustpilot consider the company as a whole, not just loans specifically. PayPal has very low ratings on Trustpilot, however, the overwhelming majority of these reviews don’t relate to its loan services.

Positive reviews of the PayPal working capital loan can be found directly on the PayPal website. Previous customers mention how easy and stress-free the process is and the fact that there’s no credit check. Users also love not having to micromanage their money because payments are made automatically from sales.

Where criticism arises, it tends to be focused on slow or unresponsive customer service teams and high interest costs. Additionally, some users have reported an increase in the number of loan rejections recently, which may be linked to business performance during the pandemic.

What Is PayPal Working Capital?

PayPal working capital is a program that leverages the company’s reach and specializes in loans it can streamline. The platform offers two types of loans: a standard business option that’s open to all applicants, and a working capital loan, which is only available to holders of a PayPal business account.

Both loan types boast a speedy application process that can be completed in about five minutes, and in most cases, funding is available within minutes of loan approval.  The easiest way to repay your PayPal working capital loan is via a percentage of your PayPal sales, which makes the process incredibly simple to get to grips with. A minimum payment is required, and PayPal charges just one competitively-priced fixed fee.

PayPal Working Capital Pros
Convenience
No credit checks on working capital
Flexibility
Fast funding
Low fees
Low revenue requirements
PayPal Working Capital Cons
A large list of ineligible sectors
Not available in all states
Working capital is only available to PayPal customers
Weekly or daily repayments

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.


Anthony Edmundson

Written by: Anthony Edmundson

Freelance Content Writer

Anthony is a freelance content writer and voice over artist since 2017. Though Anthony specializes in a wide range of topics, it's through running his own company and many years of working in the business lending industry that he can offer the expert advice our readers count on.

More about me
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Dominique Broadway is an award-winning personal finance expert. She provides advice on all areas of personal finance including student loans. Her advice has been featured in numerous publications. Dominique is committed to helping tackle the student loan crisis and helping individuals make informed financial decisions.

More about me