PayPal Working Capital Review

What is PayPal Working Capital?

PayPal is a prominent, global online payments system that uses online money transfers as an alternative to traditional transfer methods such as checks and money orders. PayPal offers small business loan products to merchants who operate using a PayPal business account, providing fast access to working capital for growth or operational needs.

One of those loan options, PayPal Working Capital, works a bit differently than traditional loans—more like a merchant cash advance. Borrowers repay daily based on volume of PayPal sales until the loan balance is fully paid. PayPal offers these loans through WebBank, a FDIC member.

PayPal Working Capital is fast — you receive money within minutes — and has relatively low repayment costs. The eligibility requirements also are low, your PayPal sales serve as collateral, and no personal credit checks are required.

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Lender highlights

Control and flexibility: You get to choose how to structure your loan; decide what percentage of PayPal sales to use as repayment, with a higher percentage resulting in a lower fee.

One fixed fee upfront: No interest payments, no hidden fees; you just pay one fixed fee that you get to find out before you sign on the dotted line.

Pay as you earn: Since repayment is based on a percentage of your sales, you only pay in proportion to what you bring in the door. On days where you sell nothing, you pay nothing.

No credit check: Unlike most lenders, PayPal Working Capital does not subject you to a credit check. The application process is remarkably simple.

What PayPal Working Capital offers

PayPal Working Capital offers a form of merchant cash advance that involves no interest charges, monthly bills, or fees aside from the single upfront loan fee. The loan amount depends on PayPal sales history. And borrowers pay back their loans automatically with a percentage of sales, chosen upon application. The higher the percentage chosen, the faster the repayment.

Automatic repayments begin 72 hours after receipt of funds. Since repayment amounts are a percentage of each PayPal sale, the daily repayment amount changes along with sales volume. No payment is required on days without sales, though a minimum repayment of 5-10 percent is required every 90 days to remain in good standing. There is no penalty for making manual payments or paying the loan in full at any time.

PayPal Working Capital: At a glance
Loan product Loan amount Loan term APR range Fees Time to funding
PayPal Working Capital Up to 30% of annual PayPal sales, from $1,000 to $97,000 for first loan (up to $125,00 for subsequent loans) N/A* N/A** One fixed fee*** 5 minutes for approval, seconds for funding once approved

Rates current as for 6/16/2018

*Continue to pay until the loan is repaid and the fee paid off.

**The fixed fee is determined by the amount of your loan, the repayment percentage you select, and your business’s PayPal sales history. There are no other fees. A higher repayment percentage translates to a lower fee.

***PayPal Working Capital has no periodic interest.

Eligibility requirements

Loan product Annual revenue Min. business credit score or personal credit score Time in business
PayPal Working Capital N/A; based on PayPal sales N/A; eligibility is based on PayPal sales history Must have had a PayPal Business or Premier account for at least 3 months


Additional eligibility factors

Those with a Premier PayPal account must process between $20,000 and $20 million in annual PayPal sales to be eligible for Working Capital. Those with a Business PayPal account must process between $15,000 and $20 million in annual PayPal sales to be eligible.

Businesses that have an existing PayPal Working Capital loan must pay it off before they can be eligible for another.

PayPal Working Capital is available in the United States, Australia, and the United Kingdom.

How to apply

Apply online using basic info about your business and yourself, such as contact details, birth dates, and SSNs of all the primary business owners and managers. Once you have provided information about you and your business, next select your loan amount and the percentage of your PayPal sales that will apply to your repayment and fee. No additional documents are needed; because the loan is processed within your PayPal account, the company uses your account information to adjudicate the loan.


Pros Cons
  Extremely fast—get funding in minutes   Only for PayPal users
  Flexible structure that borrower chooses   One loan allowed at a time; no extra funding
  One flat fee upfront; no interest payments   Loans max out at $125,000

Who is the best fit?

PayPal Working Capital is best for successful PayPal users with predictable-but-not-enormous sales volumes who need a quick infusion of cash for business growth or operations.

Fine print

Due to the unique structure of PayPal Working Capital, borrowers do not have to worry about late fees, pre-payment fees, penalty fees, or any other fees. A borrower’s PayPal sales serve as collateral.

PayPal Working Capital’s website is well populated with information and easy to understand. Borrowers who qualify should have no problem quickly and confidently accessing capital with this product.

The bottom line: How PayPal Working Capital stacks up

PayPal Working Capital is an excellent option for PayPal users who want fast access to cash and simple repayment, but may not be eligible for more sizeable business loans, whether a PayPal Business Loan or through other lenders. PayPal Working Capital’s flexibility, simplicity, transparency, and ease of use gives borrowers a straightforward and confidence-inspiring option for accessing business capital.

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