PayPal Business Loans: Are They Worth It?

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.

Advantages

• 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.

Disadvantages

• 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 LoanBuilder.com 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 PayPal.com/WorkingCapital 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.