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Getting a Working Capital Loan from PayPal

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Borrow between £2,500 and £300,000 and choose to spread the cost of your loan over 4 - 18 Months with easy to manage instalments.
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Getting a Working Capital Loan from PayPal

Merchant cash advances give small businesses access to an added boost of cash quickly. They are often used by those who do not apply for loans from the banks or other big financiers, as businesses are not required to have any assets to use them.

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What are the Pros and Cons of Merchant Cash Advances?

There are many pros and cons of merchant cash advances, but here is a quick snapshot into the benefits and downsides of getting a merchant cash advance:

Pros

Cons

PayPal and Loans

Since its launch in 1998, PayPal has continued to go from strength-to-strength. There have been some competitors that have come close to overtaking it’s success, but PayPal has remained at the forefront of online payments.

According to PayPal’s 2016 report, there are now more than 15 million active vendors using their portal. So it makes sense that they offer their own form of merchant cash advance: PayPal Working Capital Loan.

What is Paypal’s Working Capital Loan?

PayPal first started offering Working Capital Loans to select UK merchants in the autumn of 2014, with country-wide rollout taking place in 2015. This offering was fairly new to the world, having only launched in the States a year earlier. So why did they make the move to the UK?

Cameron McLean, the Managing Director of PayPal UK, explained their reasons, saying:

“Small businesses are the lifeblood of the British economy. But seven years after the start of the credit crunch, many of them are still struggling to get funding. According to the British government, around a third of SMEs rely on retained earnings or the owner’s own finances rather than bank or equity funding. This means that many find it very difficult to finance their present needs or future growth. And the problem is acute for smaller, online businesses. PayPal is well placed to make a difference.”

How Does it Work?

The good news is that PayPal’s working capital loans are straightforward. Here’s how it works:

Are There Any Fees or Charges?

Unlike the more traditional financiers, PayPal has one fixed fee, which will be explained prior to completing your application.

There’s no late fees, no fees for additional repayments, and you’re not required to pay interest on top of the loan and fee amounts.

It is worth noting that the higher your daily repayment percentage is, the lower your fixed fee will be. However, whilst a lower repayment percentage results in a high fee, you also have a degree of more flexibility as you’ll get a larger cut of your sales.

What Makes PayPal a Better Option than the Banks?

In this new era of digital payment, the finance offered by the banks has started to feel more and more rigid, and a much less accessible option - especially for small businesses. PayPal Working Capital makes the process of getting funding for your business simpler and faster.

We’ve created a quick comparison table for you, so you can see how their offering compares to their main competitors:

PayPal Banks Credit Companies
Application Process Five minutes At least one hour Around 30 minutes
Funding turnaround time Less than one minute Up to five weeks Up to two weeks
Repayment Schedule Percentage per sale Every month Every month
Interest No Yes Yes
Fees One fee only Yes, including activation fees, annual fees and late payment fees Yes, including activation fees, annual fees and late payment fees
Early Repayment Charge No Yes No

Am I Eligible?

Though it is easier to apply successfully for PayPal Working Capital, there are some basic requirements that you need to meet in order to qualify. These are:

PayPal will also take the following into account when considering whether to grant you a loan:

They take these into consideration so that they are able to accurately determine the size of the merchant cash advance they can offer you, as well as whether your business is eligible to for PayPal Working Capital.

How Do I Apply?

It’s easy to apply for PayPal Working Capital:

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