PayPal Business Loans Review
Fixed-rate fee, amount not disclosed
$1,000 to $200,000
Nine months
$15,000
Pros and cons of PayPal business loans
| Pros | Cons |
|---|---|
| No credit check Automated payments Very fast funding times Quick and easy application Loans require a personal guarantee Easy-to-meet revenue and time-in-business requirements | Weekly or per-sale payments Doesn’t build business credit Must commit to using PayPal during repayment Must have a PayPal Business account Not available in Hawaii, Nevada, North Carolina, North Dakota and South Dakota Financing cost not disclosed until you apply |
PayPal business loans review
PayPal isn’t in small business lending per se (it actually partners with WebBank to fund its loans), but it is in a unique position to see your business’s daily cash flow — or at least the portion that you route through the payment processor. If you accept a lot of customer payments through PayPal, you may be in a strong position to get one of two unique loans with minimum hassle and no credit check.
PayPal working capital loans work by shaving off a percentage of each sale you make through the platform until the loan is repaid. If you’re in the market for a more traditional-style funding option, PayPal business loans are repaid with regular weekly payments straight from your bank account. In both cases, you’ll pay one flat-rate fee (tacked onto your loan balance) in lieu of interest. PayPal doesn’t offer any hint of how much it’ll be without applying first, so it could be affordable or very expensive.
Who is PayPal business loans for?
- You already accept payments through PayPal. You’ll need to process at least $15,000 or $20,000 in annual sales (depending on the type of account you have) through a PayPal account that’s been open for at least three months in order to be eligible for financing.
- You’re looking for quick funding. PayPal will show you if you’re eligible for funding, and if so, there’s limited documentation and preparation you need to do to apply. If approved, you’ll see the funding available in your account within minutes.
- You’re looking for flexible repayment. You’ll need to make a minimum payment of 5% or 10% (depending on the type of account you have) every three months — but aside from that, your payment amount will scale according to your sales volume. PayPal will automatically deduct payments, too.
PayPal business loan financing at a glance
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Working Capital Loan | $1,000 to $150,000 ($200,000 for repeat borrowers) | Varies depending on your sales volume | N/A | One-time fixed fee |
| Small Business Loan | $5,000–$100,000 ($150,000 for repeat borrowers) | to weeks | N/A | One-time fixed fee |
Term loans
A PayPal business loan works much like other short-term business loans, with a few minor differences. Once you apply, you’ll see the funds show up in your PayPal Business account by the next business day if you’re approved before 5 p.m. EST. Your payments, on the other hand, will automatically come out of your business bank account each week instead of on a monthly basis, like most other loans.
It’s important to know that PayPal doesn’t charge traditional interest on any of its financing products; rather, you’ll pay a fixed funding fee that’s added to your loan balance at the start of repayment. You can pay off your business loan at any time, but because you aren’t being charged regular interest, you won’t actually gain any savings on financing costs. You’ll just be free of the debt sooner, which is still useful.
Working capital loan
If you need a bit more flexibility in repaying the debt, PayPal’s working capital loan might be better. You’ll be subject to slightly smaller funding amounts compared to a PayPal business loan, but if approved, you’ll see the funds available in your PayPal Business account “within minutes,” according to the company.
Repaying PayPal’s working capital loan is where things start to differ more. PayPal will take a cut of each payment you receive into your account based on a percentage you chose when you applied. Higher percentage payments mean you’ll pay off your debt faster and be charged a smaller fee. If you make no sales, you won’t have to make any payments aside from a minimum payment amount ranging from 5% to 10% of your loan amount, due every 90 days.
PayPal business loan borrower requirements
| Minimum annual revenue |
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| Minimum time in business |
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| Minimum credit score | N/A |
One of the defining features of PayPal loans is that businesses that wouldn’t normally qualify for financing may be able to get an easy “in” with one of its two business loans.
Any business that’s been using PayPal for at least 90 days and has generated $15,000 in sales for the year is eligible for funding via a working capital loan. Even its term loan requirements are easy to meet. Businesses with at least $33,300 in sales and a mere nine months in business may qualify, whereas most other lenders typically require two years before you can even apply.
Alternatives to PayPal business loans
| PayPal Business Loans | American Express Business Loans | iBusiness Funding | |
|---|---|---|---|
| Minimum credit score | N/A | 660 | 660 |
| Loan products offered |
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| Time to funding | Minutes | 3 to 5 days | 2 to 5 days |
| Starting APR | N/A | 6.98% | Not disclosed |
| Maximum loan size | $200,000 | $75,000 | $500,000 |
| Minimum annual revenue | $15,000 | N/A | $50,000 |
PayPal Business Loans vs. American Express Business Loans
American Express business loans are only available to current Amex business customers. In fact, the only way you can actually get one of these loans is by logging into your online account to see if you have any active Amex business loan offers – you can’t proactively apply for a loan. If you only need a small to moderate amount of funds ($75,000 or less) and you’re an Amex customer, it’s worth checking to see what rates you qualify for.
PayPal Business Loans vs. iBusiness Funding
If you’re looking for a longer-term loan, iBusiness Funding’s business loans come with terms of up to seven years, allowing you to spread out larger costs over a longer time frame. In addition, while a line of credit doesn’t offer flexible repayment options like a working capital loan, it does allow you more flexibility to borrow money when needed without having to re-apply for it all over again. It’s still relatively fast as far as small business lenders go — funding approved applicants within five business days or less — but it’s not quite as instantaneous as PayPal’s working capital loans are.