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PayPal Business Loans Review: Everything You Need To Know

If you are a business owner who needs additional funding for your business, then this PayPal Business Loans review is perfect for you. This will provide you the essential information you need about the loan, essentially helping you decide whether it’s the right one for your business or not.

PayPal Business Loans Review What You Need To Know

Based on the 2017 survey conducted by the Small Business Administration (SBA), it was found that the rate of small business owners looking for a loan is on the decline. However, the amount they borrow is still a lot — amounting to roughly $600 billion each year. Mind you, this does not even include other types of financing such as equity investments or buyouts yet.

But then, this does not entirely mean that American business owners do have million-dollar loans. In fact, according to the Federal Reserve, the average size of all business loans was $663,000 in the same year. Most business owners though borrowed less (in fact, over half of all business loan applicants applied for $100,000 or less) particularly those outside of large commercial loans.


The data we presented above goes to show that business loan is prevalent in the country, and that’s totally fine!

With such demand, it is not surprising now that there are a lot of financial institutions out there providing businesspeople with business loans – one of them is the famous PayPal.

Yes, PayPal is not only a platform to send and receive money internationally, but it also does offer a business loan program, which is what we are going to dig deeper into this post.

For a detailed PayPal Business Loans review, we are going to tackle the following:

  • Who is PayPal?
  • What are the requirements for PayPal business loans?
  • How to apply for a PayPal business loan?
  • What types of business loans does PayPal offer?
  • How much are the loan amounts for PayPal business loans?
  • How long does the approval takes for a PayPal business loan?
  • What are the PayPal business loans’ rates and terms?
  • What are the available refinancing options?
  • What fees does PayPal charge for?
  • What are the repayment options?
  • What are the pros and cons of PayPal business loans?


Perhaps most of us already know who PayPal is. But, for those who may not be that familiar about PayPal, here’s a quick introduction about the company:

PayPal Holdings Incorporated or popularly known as PayPal was established in 1998. It is a payment processor, which initially was called “Confinity”. It was only in 2002 when the company decided to change into their current company name when the company created its IPO, at the same time, because of a subsidiary of eBay.

However, in 2015, PayPal became a standalone company.

As mentioned, PayPal is known as a payment processor for most online sites as well as commercial users. The company’s payment system, which is also called PayPal allows consumers to transfer money from banks and major credit card accounts, as well as between PayPal accounts.

PayPal was named as the 204th company listed on the Fortune 500 list. The company landed on that spot for having a revenue of over $15.4 billion per year.

Apart from personal accounts, the company also offers business accounts. If you do have a business account, and you hit other requirements set by PayPal, you are more likely to be eligible for one of the different types of business loans that they offer.

Just to be clear, PayPal is not a bank. However, the originator of the company’s business loans is WebBank, which is an American bank, and a member of FDIC.

While PayPal makes lending decisions, as well as handling of loans, the funds are provided by WebBank.


As mentioned earlier, the qualifications vary between the two types of business loans.

For your reference though, you may check below set of requirements for both:

PayPal Business Loans

  • Must have a minimum FICO score of 550
  • Must have an open PayPal business account
  • You should be located in the 50 United States or D.C.
  • Have been in business for at least 9 months
  • The business must generate at least $42,000 in annual revenue
  • Does not have any active bankruptcies
  • Should not be a member of an excluded industry (e.g. attorneys, collection agencies, credit bureaus, schools, gambling businesses, gun stores, financial services, political and labor organizations, auto dealers, non-profits, religious organizations, civic organizations, artists and their managers.)

PayPal Working Capital

  • No minimum credit score requirement
  • Must have a PayPal business or premier account that is active for three months or longer
  • Should be located in the 50 United States, D.C., Australia, Germany, or the UK
  • Have processed $20,000 or more in annual PayPal sales with a premier account or $15,000 or more in sales with a PayPal business account. Showing 90 days’ worth of activity for either type of account is adequate.
  • Does not have an existing PayPal Working Capital loan

Furthermore, when applying for any of the two, you will be asked to provide basic information about yourself and your business. The information you will provide includes your name, contact information, birth dates, and social security numbers of the business owners.

If you have an existing PayPal though, some of the information in your application might be pre-filled already, and all you need to do is to confirm the information.

For the pre-approval process, PayPal will not conduct a check of your credit. The company focuses instead on your monthly business income during the review process.

When it comes to a hard credit check, PayPal states that they may conduct personal record inquiry as well as a credit check on business owners. This may impact your credit score. But this will only be done after you get the pre-approval.

In some cases, lenders might request additional documents for further review. Documents they may ask include bank statements, company financial reports, as well as tax returns.

The approval of your loan is based on your business’s financial data. Thus, business loan offers from PayPal are only valid for a limited time. This means that once the offer expires, you will need to re-apply for the loan.


To apply for PayPal Business Loans as well as PayPal Working Capital, you must follow the following steps:

1. Make sure you check your eligibility. To not put your efforts to waste, take time to get a pre-approval from PayPal by filling out a short online questionnaire. Do not worry as this process will not affect your credit score.

2. Choose an appropriate loan term. Once you get a pre-approval, PayPal will provide you with repayment terms, as well as the amount you can be approved for. Check it all out and then choose the terms, and the amount you actually need.

3. Submit the necessary documents. For PayPal to complete the underwriting process, you will need to provide the necessary documents. To expedite the process, make sure to keep everything handy and ready.

4. Get your loan. Once everything is done, you will be asked to sign the agreement. Immediately after receipt of the signed agreement, the funds will be transferred into your PayPal business account.

In the video below by Jerry Banfield, he discusses the whole process of a PayPal business loan application. Check this out:


Now that you already know who PayPal is and you’ve learned how the business loans works, this time around, we’re going to look into the two types of business loans offered by PayPal.

Please take note that both do have their own set of terms as well as requirements for qualified borrowers.

PayPal Business Loan

Called as LoanBuilder, the PayPal Business Loan is a fixed-fee term loan that borrowers can pay back in weekly installments. By the way, LoanBuilder is a small business lending company that PayPal bought in 2017.

To qualify for this particular business loan type, you must have a PayPal business account. You also need to meet other eligibility requirements set by PayPal to ensure you are qualified to apply for a business loan.

PayPal Working Capital

In 2013, PayPal launched its Working Capital program. The company opened this loan program to all business account users the year after.

PayPal Working Capital is a business loan that aims to help provide funds for a business’s day-to-day operation.

The PayPal Working Capital is ideal for product or service expansion, equipment purchases, as well as inventory, and payroll.

Since its inception, PayPal Working Capital has already provided more than $2 billion in funding to over 90,000 businesses globally.


At this point in our PayPal business loans review, we are going to talk about how much you can actually borrow from a PayPal business loan.

As mentioned above, there are two business loan types that PayPal offers — PayPal Business Loans and PayPal Working Capital. Each of them does have its own range of loanable amounts.

For PayPal Business Loans, borrowers can loan money ranging from $5,000 up to $500,000. The amount depends on your eligibility.

Upon application for this particular loan program, a PayPal business funding expert will review your qualifications in minutes, and if you are eligible, he or she will discuss with you proposed terms for the loan.

Meanwhile, for PayPal Working Capital, the loan amount ranges from $1,000 up to $300,000. You can borrow up to a maximum of $35% of your annual PayPal sales for your first loan.

Take note, however, that the company uses a formula to help determine the amount that you are eligible to borrow.


If you use PayPal to transfer funds to your family, loved ones, or businesses, you know how fast the process is, right? PayPal is a very efficient online money transfer platform.

Just the same, PayPal has also gained reputation being fast in terms of funding business loans.

If your loan was approved at 5 pm ET, for instance, you could receive the funds as soon as the next business day. Definitely faster compared to other business loans provider.

Meanwhile, if the lender approves your Working Capital loan, you get to receive the funds into your PayPal account within just a few minutes as soon as you have agreed with the program’s terms and conditions.

You see, the process is quick and simple, and the funding is quick!


So, we have already discussed a lot of essential information about the business loans offered by PayPal. This time around, let’s talk about the rates and terms.

If you are planning to make a loan for your business, it is important to be fully aware of the rates and terms so you’d know your obligations as a borrower. Also, this helps you decide whether PayPal’s rates and terms are feasible for you.


Unfortunately, PayPal does not disclose its rates for any of its business loan programs. The rates are determined once you get an offer from the company.

Instead of the usual annual percentage rate (APR) though, PayPal does have a one-time borrowing fee that may range from 2.9% to 18.72% of the total loan amount.

For PayPal business loans, you just have to multiply the amount you’re borrowing by the total interest percentage to know how much your borrowing fee is. The borrowing fee is only calculated once and stays as it is for the whole duration of the loan.

Meanwhile, with PayPal’s Working Capital business loan, the company charges a fixed rate.

The rate is based on the amount of your loan, the repayment schedule you select, as well as your PayPal sales history.

In addition, the company will not charge you any additional fees or any periodic interest. What’s nice about it is that the overall cost of borrowing is lowered when the repayment percentage is higher.


Unlike other business loans out there, PayPal business loans are not considered as a medium to long-term loans, which means if you want to borrow and repay the loan for 18 months and more, PayPal may not be the right company for you.

PayPal is a good option, though, for those business owners who need fast access to cash for short-term projects or for working capital needs.

The terms for a PayPal Business Loan may range from 13 up to 52 weeks. The available term depends on how much the loan is. Other factors may also be considered by the lender.

As with the PayPal Working Capital, the maximum term is 18 months. It requires the borrower, however, to pay a minimum of 5% or 10% of your loan’s balance every after 90 days.

Now, if in case your loan will take over 12 months to pay off, the 5% requirement will be applied. If you need more than 12 months to repay the loan, you will then be subject to the 10% maximum.

Meanwhile, catch-up payments may be made if in case you fall behind.


Unlike other lending institutions that allow refinancing options for business loans, for PayPal Working Capital business loan, refinancing is not an option.

If you need to get more funds for your business, you will need to pay off your existing loan first, and then wait for three business days before you can apply for a new one.

Please take note that the terms on your succeeding loan may change since it will be based on your PayPal sales history.


Just like most PayPal business loans reviews we read, we also find the fees charged by PayPal relatively low as compared to other short-term lenders out there.

Administrative Fees

Fortunately, PayPal does not charge administrative fees such as application or origination fees on any of the company’s business loans. Without admin fee, it means you get the exact amount you loaned for, which is great.

Late Fees

Another notable thing about PayPal Business Loans is that there are no late fees. However, payments are automated.

If in case your payment is rejected because of a lack of funds, the lender will then charge you a fee, which is acceptable and totally normal.

Same with PayPal Working Capital, no late fees or periodic fees charged as well. If you fail to pay though, based on the terms of your agreement, you will need to catch up payments.

Returned Payment Fees

If your PayPal Business Loan payment is returned, PayPal will charge a $20 returned-item fee.

For Working Capital, payments are takes as a percentage of your PayPal sales. Thus, you will not be charged for a returned payment fee.

Early Payment Fees

For both PayPal Business Loans and Working Capital business loans, the company charges a fixed fee. The payback amount stays the same regardless if you use the entire term to repay the loan or pay funds back the day after disbursement.


According to PayPal, it has a simple repayment process. Once you take out a loan, the terms are explained in detail, and the payments are automated.

When it comes to payment methods, for PayPal Business Loan, the lender will sync with either your PayPal account or business banking account and will deduct loan payments from there on a weekly basis.

Once you sign your loan documents electronically, you will also be asked to fill out banking instructions for the weekly electronic debit.

Meanwhile, for PayPal Working Capital loan, the lender will automatically get a percentage of your daily sales until your loan is paid off. The amount they take will depend on your sales. If your sales are high, then the payment will be high. But on days when you do not have sales, you won’t pay for anything as well.

It is also important to know that PayPal has minimum payment requirements that range from 5% to 10% of your total debt every 90 days, depending on your loan terms, which means, if you fail to meet the requirements set, you will need to pay more in order to get back in good standing.


PayPal business loans do have their share of highs and lows. These are what we found:


  • It provides fast application and funding.
  • It requires low credit to no credit score.
  • The business loan programs are available in all 50 states and D.C.
  • It does not charge any origination or application fees.
  • It comes with clear documentation and support materials.


  • It requires either daily or weekly repayments.
  • The loan programs are only available to PayPal customers.
  • It may require a personal guarantee.
  • Loan programs do not include seasonal businesses with uneven revenue.


It’s nice knowing that apart from being a platform used to transfer funds online, PayPal has stepped up and already offered business loans as well. Needless to say, they have feasible and achievable requirements for loan borrowers.

Are you a business owner? Having found out about PayPal business loans, do you find it helpful?

Hopefully, through this PayPal business loans review, we get to give you another probable option where you can borrow money for your business needs.

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