It is no doubt that getting loans from all these traditional routes like banks or credit cards has been made too difficult for small-scale business owners.
Even if you are lucky to get it eventually, the stress, the requirements, and even the time it will take you is something to think twice about.
This is why most incoming businesses are opting In for more favorable alternatives that will not have lots of crazy criteria or requirements.
Of course, one of those few options in this category is PayPal Working Capital.
PayPal’s working capital was launched in the year 2014 and over the years grown so significantly to be one of the best platforms that small scale businesses can leverage the get loan for their businesses.
Amid several negative and positive reviews of PayPal loans from different business owners, with the fact that there are also many other so-called competitors or alternative funding options for businesses online, You might want to know if you should go for PayPal working capital as a way of obtaining that extra capital that your business needs or not. This is why I have made my research on this topic to come up with all that you need to know about the Paypal working capital, the advantages, the disadvantages, the requirements needed to apply for the loan, and how to apply.
For those who already know how the PayPal working loan works and just want to know how to apply, I have written well-detailed content to guide you through. You can just follow here to read it. How To Apply For A PayPal Instant Loan
How PayPal Working Capital Works
The Paypal working capital is a business loan that has just one fixed fee that will be deducted from your future PayPal sales. This repayment plan continues until the total amount borrowed is fully repaid together with the interest. It has no interest rate or early repayment charge.
As soon as your loan application is successful, your fund will be deposited into your PayPal account within a matter of minutes. Perhaps this is one of the reasons why the PayPal loan looks to be the best compared to all the other local funding options. PayPal loan is seemingly fast.
Thus, when the time comes for you to make the repayment, fees are deducted automatically from any sales your record from your PayPal account. Mind you, your repayment plan starts just four days after you get the loan. Perhaps this is one of the bad sides of PayPal’s Working capital.
Most people complain that the period between the grant and the repayment is just crazily short. However, the total sum of your successive repayments will be to the repayment percentage plan you have from the outset while applying for the loan.
How Much You Can Borrow With PayPal Working Capital
The amount of loan you can get from PayPal is solely dependent on the number of sales you have been able to record plus your account payment history with your previous usage of PayPal working capital. The minimum amount you can borrow is 35% of the total annual PayPal sale you recorded on your account, with the maximum amount you can borrow being. £150,000. You might not be able to borrow above this. So if the 35% of your annual PayPal sale is more than £150,000, then you might have to reduce the percentage.
For you to access the PayPal Working capital:
- You must have a business PayPal account
- Your account must have been 3 months old (90 days)
- You must have processed yearly sales of $15,000 (for Business account holders) or $20,000 (for Premium account holders) in annual PayPal sales.
- For a premier account, you must have processed about 12,000 yearly PayPal sales.
This requirement looks very easy even for those small-scale businesses that make regular use of PayPal.
But if you are not a regular PayPal user and you have not met these requirements, then getting the loan might be a bit hard.
As I have earlier said, if you are a regular PayPal user, then the amount of loan you will be eligible to get will be determined by the total number of annual sales you have been able to make on your PayPal account. However, if you are looking to borrow a larger amount of money above the maximum of £150,000 then you might be running into some limitations.
You can simply apply for the online PayPal instant loan by visiting their website (PayPal.com). This is where you will have access to the application form which you will be required to fill out. If your application is successful, you will then receive your loan within a few minutes.
Kindly note that your application has nothing to do with your personal and business credit score.
However, just like I have earlier said, one important criterion you should have met is for your PayPal account to have been up to 90 days old.
How Much It Cost To Apply
You will be required to pay just a fixed amount of money. There is no additional interest, no late fees, and no additional repayment. The amount of fixed fee you will be required to pay will be determined by the amount you want to borrow, the number of sales you make annually, and the capacity of your business together with your target repayment percentage.
If you offer a higher repayment percentage, then you will be offered a cheaper fixed fee and if you offered a lower percentage repayment, then you have to pay a higher fixed fee.
Who Funds PayPal Working Capital
PayPal was founded in 1999 by John Malloy of BlueRun Ventures, this is about 22 years ago. It was initially developed and instigated as a money transfer service. Over the years, PayPal has grown appreciably that it now offers both short-term and long-term loans to its customers.
How PayPal Loan is Calculated
Here are the three things that are used to calculate the amount you will be able to apply for:
- Your previous PayPal sales
- The account payment histories
- Your previously taken loan.
These three things are what will be added together to determine the amount you will be qualified to apply for.
Advantages of PayPal Business Load
Like every other business online, PayPal Working Capital also ave its advantages and disadvantages:
Here is the good side of the deal. Or better still the Pros
- Fast To Apply For: PayPal Working Capital has one of the fastest application periods compared to every other alternative funding. You can simply apply and get your loan within a few minutes of application from your PayPal account. After which you can transfer the money into your local bank account.
- Easy Application requirements: It looks all o easy to meet all the requirements needed to qualify for the PayPal working loan. Once you have, get with all the three criteria required of you, (Making the expected amount of annual sales, having an account that is up to 90 days old) and all other requirements, you can be sure that getting the loan is 99.9% sure.
- Low-Interest Rate: When compared to all other short-term business loans, PayPal is quite very affordable. The interest on the loan is relatively small especially if you have a good Paypal sales history and you choose to offer to pay your loan with a good percentage of your sale.
- Easy to Repay: Paypal makes it very easy for you to pay back your loan. The repayment structure is amazing compared to other funding options. Paypal automatically deducts the exact agree repayment percentages from your PayPal account at the end of each day’s sales period. you won’t have to worry about setting a reminder to pay back your loan. PayPal automation does that for you with ease. Although you can as well opt to make your loan repayment manually. This is however left to you to decide. But by default, PayPal set your repayment plan to automatic unless you change it yourself.
Disadvantages of PayPal Business Load
Just like some other small business loans, PayPal also has its disadvantages. It is now left to you to decide on whether the advantages are relatively more than the disadvantages when compared to all the other small business loaners.
- Can be Expensive at Times: Paypal loans can be expensive in some cases. Based on the information on their official website, PayPal could charge you between $0.01 to $0.58 fee for every $1 you borrow. So imagine getting as high as $0.058 for every one dollar you borrow, that is a whole lot of money when you calculate it especially when you aren’t sure if your business can make up to that at the end of the day. This is one of the itches of applying for a PayPal working loan for a small business.
- No Prepayment Incentives: PayPal does not give you this option to repay our loan earlier than you have agreed to pay even if you can pay. This is because much interest won’t accumulate on the borrowed amount which of course will be a loss to them. So they prefer to stick to the already fixed repayment plan than pay before time.
- Small Loan Amount: One big bad side to the PayPal loan is that the loan amount is relatively small which makes it obtainable only by the small-scaled business. Since you might not be able to get an amount of more than $97,000 for your first loan and $125,000 for your subsequent loans. Also, you are limited to taking just one loan per time. So if you need more than this amount for your business, then PayPal might not be the best option for you.
Getting a PayPal loan is very easy, so far you are able to meet up with their requirements. Although, there are lots of negative reviews to this due to the fact that most large-scale businesses are not able to access the loan since they might want a higher loan which PayPal might not be able to give. However, the PayPal loan has been of immense help to lots of small-scale businesses. We however suggest that if you are a small-scale business that is looking forward to a loan funder to push your business, then an instant PayPal loan is great for you.
Related PayPal Loan Guide
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- PayPal Instant Loan Review 2022
- How to Get A PayPal Business Loan – Ultimate Guide
- All You Need to Know About PayPal Working Capital
- How To Apply For A PayPal Loan
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- Is PayPal Working Capital Still Giving Loans?
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