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.