PayPal Business Loans: Are They Worth It?

There are so many different options available these days for small firms that are looking to secure financial support, but not many people may realize that a PayPal business loan could well be a viable option.

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    Since it was established all the way back in 1998, PayPal has grown to become one of the best-known brands on the internet with its services transforming the way that many people choose to pay for items or move money around. However, while small businesses can use their services to accept online payments, send invoices and much more, they can also access specialist funding from it. According to the brand, its PayPal Working Capital service can give businesses access to cash advances in just minutes, while it also offers support through its LoanBuilder service too.

    In this review, I am going to examine both services and hope this detail will help you determine if a PayPal loan may be right for your offering.

    What Are PayPal Loans?

    As we have already briefly made reference to, PayPal offers small business funding through both its PayPal Loanbuilder offering and PayPal Working Capital.

    Branded as LoanBuilder – A PayPal Service, the former allows businesses to use a special tool to literally construct their loan and get estimated options as soon as possible. Businesses are able to apply for loan amounts ranging from $5,000 to $500,000, while there is no origination fee or early repayment fees.

    In contrast, any PayPal Working Capital review has to make reference to how the service offers flexible payments with no credit check, while funding can apparently be secured in just minutes. Interestingly, the maximum loan amount available can be up to 35 per cent of the business’s annual sales through PayPal.

    How do PayPal Business Loans Work?

    So while you now know the key differences between each service, it is important to take a look at how the two PayPal lending options work.

    The general process for LoanBuilder is that you complete a questionnaire that takes up to ten minutes in order to assess whether your business will ultimately be eligible for support. Following that you can adjust the loan terms so that they meet your requirements and then complete the application. The loan can then be transferred into your business bank account, in some cases as fast as the next business day.

    PayPal Working Capital also boasts a speedy application process, with the website stating that it can be completed in just five minutes. Interestingly, one aspect that marks the service out from others is that businesses actually repay the loan amount and any fees through a percentage of their PayPal sales. This means that you have to select a percentage of sales that will go towards repayment as you go through the approval process.  Once you have been given the green light, the personal loan deposited to PayPal will be available and you then repay it automatically with that selected percentage of your sales.

    How Do I Qualify?

    Both LoanBuilder and PayPal Working Capital have their own eligibility criteria that need to be fulfilled if small businesses are ultimately going to access financial support.

    In terms of LoanBuilder, the service can provide funding to businesses based across all 50 US states but stipulates that they should have been in business for at least nine months and also have annual revenue of at least $42,000. Furthermore, in order to get a loan via PayPal and LoanBuilder, the business owner applying for the loan is expected to have a minimum FICO score of 550, while the service also features a large list of business types which it deems ineligible for support. These include those involved in financial services, elementary and secondary schools, attorneys, environmental organizations , short term loans, secured loans  and any businesses in public administration.and any businesses in public administration.

    If you want to get a loan deposited to PayPal through its Working Capital service, you have to have had a PayPal Business or Premier account for three months or more. In addition, you must process a minimum of $20,000 in annual PayPal sales if you are a Premier user or at least $15,000 if you have a Business account. You can also only have one PayPal Working Capital loan at a time, so you would need to pay off an existing loan in order to be eligible for a new one.

    Advantages and Disadvantages of PayPal Business Loans

    Determining the pros and cons of seeking funding from PayPal is not easy, particularly as many businesses have different needs. This means that while something may be hugely beneficial to one company, it may not offer the same benefits to another.

    However, here I have still pulled together a list of a few general advantages and disadvantages which may be worth bearing in mind when seeking support through either LoanBuilder or Working Capital.


    • PayPal Working Capital is undoubtedly a great option if you run a small business which is reliant on PayPal, with repayments being taken automatically from a percentage of sales.
    • Another major benefit with Working Capital is the lack of a credit check too, with the loan solely being based on your PayPal sales.
    • Moving onto LoanBuilder, the service is really handy in the sense that it allows you to build and tailor a financial support package that suits the needs and size of your business.
    • When it comes to both LoanBuilder and Working Capital, PayPal are quick to stress that funding can in some cases be made available very quickly. This is in contrast to more traditional banking services where it may take several days for funds to be released.
    • While other services may feature a range of fees, both LoanBuilder and Working Capital feature just a single fixed fee. Put simply, there are no hidden charges.
    • On a similar note, there are no early repayment fees on either LoanBuilder or Working Capital too.


    • While LoanBuilder does state that it can serve more than 500 different sectors, the list of areas which are deemed ineligible is not insignificant. As such, it may be difficult for some organizations to get support through the service.
    • Furthermore, LoanBuilder’s eligibility criteria states that businesses have to have been in business for at least nine months and have an annual revenue of $42,000. This means that it may not be ideal for small businesses that are just starting out and have initially low sales.
    • Working Capital may be great for businesses with a big PayPal presence, but the fact it is only available to Business and Premier account holders, who meet specific annual sales figures, means plenty of firms could be excluded from using it.

    How Do I Apply?

    Applying for financial support through either PayPal Working Capital or LoanBuilder is very straightforward and the process can be completed in just a few steps. To apply for LoanBuilder you need to:

    • Go to and press Check Eligibility
    • Enter some details about yourself and your company
    • After the questionnaire is complete, you then receive estimated loan terms which can be customized
    • Choose your terms and complete the application
    • Await approval and confirmation that the funding is available

    In contrast, to apply for PayPal Working Capital you need to:

    • Visit and click Apply Now
    • Complete the application process
    • Select the advance you require and the percentage of sales that will be used for repayment
    • Await approval and confirmation that the funding is available

    Documents Needed to Apply

    The documentation you need to complete an application with LoanBuilder can apparently vary, but the organization’s Business Funding Experts will be able to provide advice on this. Vital information that you should certainly have to hand during the process would include:

    • Basic personal details
    • Basic information about the business, including its address
    • Details on annual revenues
    • LoanBuilder adds that in some cases the only required documents may be four months of recent business bank statements

    On a similar note, PayPal Working Capital states that business owners applying for support through that service should have: 

    • Basic information about themselves
    • Key information on the business in question
    • Social security numbers of business owners and business management

    PayPal Business Loans for Bad Credit

    Considering some would regard a FICO score of around 600 as bad, it could be argued that both PayPal loan services may be able to support those with a poor credit rating.

    As we have already mentioned, LoanBuilder asks that a business owner applying for a loan should have a FICO score of at least 550, while there is no credit check carried out at all when you apply for PayPal Working Capital.

    Therefore, it could be argued that when it comes to PayPal loans, bad credit is not necessarily something that may affect your chances of being approved. As with many providers, it may simply be the case that you have to speak to an adviser to assess your options.

    Customer Support

    Both LoanBuilder and PayPal Working Capital do not hold back when it comes to the issue of customer support, which is very welcome if you want to build on your online application by speaking to someone in person.

    The websites both feature extensive FAQs and help sections to ensure people understand the process of taking out a PayPal business loan, while they also display contact numbers if you want to get in touch and ask any specific questions about your needs.

    My Conclusion

    Ultimately, it is fair to say that both PayPal LoanBuilder and PayPal Working Capital could prove to be a great options for seeking financial support if your small business ultimately falls into their eligibility criteria.

    PayPal is a renowned online brand and has developed a strong reputation through the last couple of decades, so it will undoubtedly prove to be a provider you can trust when it comes to the issue of small business loans.