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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

PayPal Working Capital Loan Review

Updated on:
Content was accurate at the time of publication.

PayPal logo

 Estimated APR range: Not disclosed.

 Best for: Business owners looking for quick funding and who already accept most of their payments through PayPal.

Pros and cons of PayPal Working Capital

ProsCons

  No credit check required

  Funding available within minutes

  Repayments are made automatically

  Doesn’t require a personal guarantee

  Not available in several states and territories

  Must be a regular PayPal business user

  Doesn’t provide many details to general public

  May limit you from switching payment processors until loan is repaid

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PayPal Working Capital small business loans review

PayPal is one of the most recognizable names on the internet and, as of January 2023, nearly 83% of Digital Commerce 360’s Top 1000 retailers accept it as a form of payment. That kind of clout allows it to offer regular business customers a relatively niche financing product: working capital loans, based on the volume of a business’s sales.

If you’re an infrequent PayPal user at best, this loan won’t be a great small business financing solution for you. On the other hand, if you’re an existing PayPal business user looking for short-term funding, it could be a good option. Just make sure you shop around for other options to make sure it’s the best fit for you, rather than relying on the fast funding and easy repayment it provides.

Who is PayPal Working Capital 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 Working Capital small business financing at a glance

ProductLoan amountsRepayment termEstimated APR rangeFees
PayPal Working Capital$1,000 to $250,000VariesNot disclosedNot disclosed

Working capital loan

PayPal’s working capital loans are almost entirely based on your PayPal sales. If you’re eligible, PayPal will allow you to choose from a range of borrowing options and repayment percentages that go toward paying off the loan. Your sales volume will impact how much you can borrow and how much you’ll be charged.

You’ll pay a single fixed fee rather than an interest rate — since a percentage of each sale will automatically go to repay the loan — as well as the fixed fee. The higher the repayment percentage you choose, the less you’ll get to keep until the loan is paid off. However, you can save money by choosing a higher repayment percentage, as PayPal will charge you a smaller fixed fee.

This also means your payment amount scales according to your sales volume. But even if your sales volume is low, you’ll still need to make a minimum payment of 5% to 10% of the loan every 90 days. However, you do also have the option of paying off the loan early with no penalty fee.

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PayPal Working Capital borrower requirements

Minimum annual revenuePayPal Business account: $15,000 in annual PayPal sales
PayPal Premier account: $20,000 in annual PayPal sales
Minimum time in business90 days with a PayPal Business or Premier account
Minimum credit scoreN/A

PayPal is unique since it doesn’t actually consider many other traditional business loan requirements when deciding whether to approve you for a working capital loan or not. Instead, it relies mostly on your PayPal sales history to determine eligibility. It generally won’t check your credit, nor will it require a personal guarantee on the funds from you or any of the other business owners.

Required documents

During the loan application process, loan applicants will need to provide personal details of all business owners and business management, even if they don’t have access to the PayPal account. The following is needed:

  • Contact information
  • Social Security numbers
  • Birth dates

Other than that, you won’t really need to submit any documentation except in rare circumstances.

Alternatives to PayPal Working Capital

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
PayPal Working CapitalAmerican ExpressCredibly
Minimum credit scoreN/AN/A500
Loan products offeredWorking capital loansTerm loans
  • Working capital loans
  • Merchant cash advances
  • Lines of credit
  • Equipment financing
  • SBA loans
  • Invoice factoring
  • Term loans
Time to fundingMinutes3 to 5 business daysSame day
Starting APRNot disclosed6.98%1.11 factor rate
Maximum loan size$250,000$75,000$600,000
Minimum annual revenueBusiness PayPal account: $15,000 in annual PayPal sales
Premier account: $20,000 in annual PayPal sales
Not disclosed$180,000

PayPal Working Capital vs. American Express Business Loans

American Express small business loans are also popular, including more traditional-style business loans with terms ranging from six months to three years. Like PayPal, American Express reserves services for members with an existing account — you’ll need to have been an Amex business cardholder for at least a year in order to qualify.

It’s quite a bit more transparent than PayPal, as it discloses its interest rate range before you apply — always a good sign. However, it does take longer to get your funding from Amex after your loan is approved and accepted: It can take up to five business days.

PayPal Working Capital vs. Credibly

Compared with PayPal, Credibly‘s business loan policies are much more open — it’ll work with any business owner who meets its broad requirements, not just clients it has a history with. Credibly also offers several different financing options to choose from, rather than just a single loan choice.

The downside is that only fairly profitable, more established businesses will qualify for these loans: Your business will need to earn a minimum of $15,000 per month, with at least a six-month track record.

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