PayPal Working Capital Business Loans Review

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Updated on Wednesday, August 11, 2021

If you use PayPal to handle some of your business’s sales and need to borrow money, a PayPal Working Capital loan could be a solution. It’s particularly useful for business owners who are short on cash, don’t want fixed payments because their sales are variable and don’t have great credit.

The downside to these products, however, is that they can be very expensive. PayPal also doesn’t disclose how much it might cost you unless you apply for a loan, so you may experience sticker shock once you see your loan terms.

PayPal Working Capital loan overview: Amounts, rates and fees

A working capital loan is a type of flexible loan that’s designed to cover short-term business needs like payroll or materials. It can be a good choice if you have a business with sales that vary a lot over the year, such as a landscaping or holiday-themed business or a stand at the local farmer’s market.

Rather than paying the loan back with the same monthly payment, as you would a traditional loan, your payment scales according to how much you sell. You do pay for that flexibility though, since working capital loans tend to be more expensive than traditional ones.

PayPal’s Working Capital loans work differently from other working capital loans you might find. You’ll need to have used PayPal for at least 90 days to process your business payments, though you’ll need to have a specific type of PayPal account to be eligible.

PayPal doesn’t run a credit check if you apply for a working capital loan. Rather, it looks at your past cash flow in PayPal itself to determine how much funding you might be eligible for and how much you’ll have to pay for it if you apply for a loan.

The biggest advantage to using a PayPal Working Capital loan is that you can receive funding in your PayPal account fast — as soon as five minutes after approval, according to the company.

PayPal will also automatically take out your payments according to a preset percentage (between 10% and 30%) from the money that passes through your account until the loan is paid off. Just like with the cost of the loan, the amount that’s withheld from your payments isn’t disclosed until you actually apply for the loan.

PayPal Small Business Loan

PayPal also offers a more traditional small business loan, available for customers who don’t use PayPal. This might also work out better if you don’t want the confusion of ever-changing payments and prefer to have the same payment every week, with a known pay-off date.

Unlike the PayPal Working Capital loan, the LoanBuilder loan is credit-based. When you apply you’ll be presented with a range of loan options (hence where the name “loan builder” comes from). This isn’t unique to PayPal though; most lenders offer you a few choices when you apply.

The LoanBuilder loans also work differently from traditional loans. Instead of being charged interest, you’ll pay one fixed fee that’s tacked onto the loan. You can pay off the loan early, but since the fee has already been charged to your account, you won’t save any money like when you pay off a normal loan early. It’s not quite a penalty fee per se, but you don’t really get any benefit of paying it off sooner besides wiping the debt from your business.

Who is eligible for a PayPal Working Capital loan?

In order to be eligible for a PayPal Working Capital Loan, you’ll need to have either a PayPal Premier account or a PayPal Business account open for at least 90 days. In addition, you’ll need to make the equivalent of at least $15,000 per year in sales if you’re using a PayPal Business account, or $20,000 per year in sales with a PayPal Premier account. You’ll also need to have paid off any outstanding PayPal Working Capital loans.

You can still use cash or other non-PayPal payment options to sell, but that income won’t be counted in the amount available to borrow, nor will it be used to repay your PayPal loan.

How to apply for a PayPal Working Capital loan

The PayPal Working Capital application is done entirely online. To apply for working capital, most people will just need to provide basic information about themselves, their business and the loan they’d like to get. In some cases, you might need the following information for all owners and managers of your business:

  • Name
  • Address
  • Birthdate
  • Phone number
  • Social Security number

If you need help, the PayPal Working Capital phone number is 877-981-2128. If you’re approved for funding, you could see it in your PayPal account in as little as five minutes.

PayPal Working Capital loan review: Should you apply?

The PayPal Working Capital loan isn’t really our first-choice recommendation for anyone due to its lack of transparency. Without applying, you can’t really know anything about the loan you might get — and if you do apply, that could put you in a high-pressure sales situation.

That said, if you use PayPal for a good chunk of your business, need fast funding and don’t have very good credit, it could very well be worth at least checking your rates with PayPal. Just remember to keep an open mind and know how much other loans might cost you too.


A working capital loan provides businesses with money for their general, everyday operation costs.

Working capital loans are used for your business’s everyday needs, like utilities, materials and labor. It’s better to use more traditional loans for investments like equipment or new facilities.

It only takes five minutes to apply and receive funding, according to PayPal. It’s important to note that this funding is deposited into your PayPal account, not your bank account.

You can get a loan via PayPal by applying online.