Paypal Working Capital review

[rockefeller]

I haven't seen anyone talking about this so I figured I'd give share my experience with you.

Paypal has now lent over $1 billion dollars to small businesses that have had an account for over 12 months and that have processed at least $20,000 per year through their account. About a year ago I received an email from Paypal inviting me to try the service. I did my due diligence, looked up reviews and finally went through the 2-3 steps to apply for working capital. I was surprised to see that I was offered $20,000 at the most and around $5,000 at the least, they have one set fee (no interest rates) which varies based on the amount you take and your payback percentage. For instance, I was offered up to $20,000 and could choose between 10%, 15% or a 30% repayment schedule. The day after you process a payment through your account Paypal will automatically take the percentage you choose from your account and apply it to your "loan", there are typically no minimum payments and no payback schedule..you only make payments when you have sales. It's also important to note that Paypal offers 15% of your annual sales processed through them up to $85,000.

Paypal does not check your credit score nor do they report to a credit bureau. This is solely based on your sales volume and repaid through your sales.

At the time I wasn't in need of money but figured I would accept an offer of $10,000 from them at a 20% repayment fee, my flat rate fee was around $350. Within seconds of clicking "accept" after I read the fine print (I honestly couldn't find any negatives since they know your sales and hedge their risk) the money was in my account...literally within 5 seconds. I used the money to pay renewals in advance, purchased more domains and the entire loan was repaid within a few months. I've since taken 2 other "loans" for 15k and 20k and each have had small flat fees, the fees actually seem to go down over time.

Although I didn't need the money at the time it does come in handy for large domain purchases that I can pay off over time with a small flat rate and also to pay down renewals, etc. Hope this comes in handy for you.

 

[CoolRev]

Thank you for sharing your experience.

I haven't really used PayPal much for processing payments but this will probably sway me into. Although the loaned amount isn't really high, at times it could come in handy and be actually useful and the flat fee only makes it that much more compelling.

I will keep my eye out for that

-Cheers

 

[rockefeller]

Thank you for sharing your experience.

I haven't really used PayPal much for processing payments but this will probably sway me into. Although the loaned amount isn't really high, at times it could come in handy and be actually useful and the flat fee only makes it that much more compelling.

I will keep my eye out for that

-Cheers

Yeah, its really a great little service that I happened to stumble into...like I said, I'm not one to buy anything on credit but after looking into this I liked the idea of automatically paying it back with sales. Since I have sales almost everyday and could repay the full amount if it were to ever come to that I decided to try it out. I'm glad I did, when the loan was paid off I had honestly forgotten about it until I received the confirmation of my final payment with an invite to apply for another.

 

[venturefile.com]

Nice. Do you need a business account for this or can this be done through a personal account? Do you know if they accept all countries?

I haven't seen anyone talking about this so I figured I'd give share my experience with you.

Paypal has now lent over $1 billion dollars to small businesses that have had an account for over 12 months and that have processed at least $20,000 per year through their account. About a year ago I received an email from Paypal inviting me to try the service. I did my due diligence, looked up reviews and finally went through the 2-3 steps to apply for working capital. I was surprised to see that I was offered $20,000 at the most and around $5,000 at the least, they have one set fee (no interest rates) which varies based on the amount you take and your payback percentage. For instance, I was offered up to $20,000 and could choose between 10%, 15% or a 30% repayment schedule. The day after you process a payment through your account Paypal will automatically take the percentage you choose from your account and apply it to your "loan", there are typically no minimum payments and no payback schedule..you only make payments when you have sales. It's also important to note that Paypal offers 15% of your annual sales processed through them up to $85,000.

Paypal does not check your credit score nor do they report to a credit bureau. This is solely based on your sales volume and repaid through your sales.

At the time I wasn't in need of money but figured I would accept an offer of $10,000 from them at a 20% repayment fee, my flat rate fee was around $350. Within seconds of clicking "accept" after I read the fine print (I honestly couldn't find any negatives since they know your sales and hedge their risk) the money was in my account...literally within 5 seconds. I used the money to pay renewals in advance, purchased more domains and the entire loan was repaid within a few months. I've since taken 2 other "loans" for 15k and 20k and each have had small flat fees, the fees actually seem to go down over time.

Although I didn't need the money at the time it does come in handy for large domain purchases that I can pay off over time with a small flat rate and also to pay down renewals, etc. Hope this comes in handy for you.

 

[rockefeller]

Nice. Do you need a business account for this or can this be done through a personal account? Do you know if they accept all countries?

No, you do not need a business account, I'm unsure on countries but I doubt it would be limited to the US. I forgot to mention that they do not check your credit score (now added), its solely based on Paypal sales volume. Once you apply you're by no means obligated to take their offer at that time.

This is the link to Paypal Working Capital: https://www.paypal.com/us/webapps/workingcapital/

 

[venturefile.com]

Yeah I tried to go through that link but it says there was an error... I will probably try to contact their support to see whats the deal.

 

[rockefeller]

Yeah I tried to go through that link but it says there was an error... I will probably try to contact their support to see whats the deal.

Did you receive an error at login or when trying to apply? When I was reading up on it before I initially applied I noticed a lot of people saying they had issues with the application although I never have.

 

[Fliper]

Paypal should also give interest on paypal balances, if paypal wants to play banking.

 

[rockefeller]

Paypal should also give interest on paypal balances, if paypal wants to play banking.

They used to have what they called a "money market" where you would earn interest on your paypal balance, this is several years ago but there was a time when I would earn several hundred dollars a month on a 3-4k balance.

 

[venturefile.com]

Did you receive an error at login or when trying to apply? When I was reading up on it before I initially applied I noticed a lot of people saying they had issues with the application although I never have.

The error message popped up when I clicked the apply now button.

 

[alcy]

good headsup post.
I wonder if they offer it outside usa.
thanks

 

[rockefeller]

good headsup post.
I wonder if they offer it outside usa.
thanks

I'm not sure of that, the least you can do is go to the link and apply, there is no penalization if you weren't eligible.

 

[alcy]

The error message popped up when I clicked the apply now button.

yep.. same here.

I might email them about it to ask later on.

 

[rockefeller]

yep.. same here.

I might email them about it to ask later on.

Seems to be a common issue, most people that have had that issue keep going back and forth and re-trying and eventually it goes through

 

[alcy]

Seems to be a common issue, most people that have had that issue keep going back and forth and re-trying and eventually it goes through

thanks
but having seen couple of various application in my life, something tells me that you or others getting it right on first attempt, while some others not being able to do so, is indication that there is more here involved than mere luck for some and lack thereof for others.

I shall investigate it further nonetheless.

regards

 

[venturefile.com]

yep.. same here.

I might email them about it to ask later on.

I already sent them an email but have yet to hear back.

 

[venturefile.com]

The reply I got:

That would be correct yes, it is a service we at this point only offer in very few countries, such as US, Australia and a few others.


I can't say when/if we will be able to offer this feature to you at some point, but it is something we do plan to expand from the current list of countries at least.

 

[MisterSoft.com]

They used to have what they called a "money market" where you would earn interest on your paypal balance, this is several years ago but there was a time when I would earn several hundred dollars a month on a 3-4k balance.

You were earning several hundred dollars a month on a 3-4k balance in MoneyMarket account...
Are you serious? Were they paying you more than 100% interest rate. Thats not realistic!
Please explain...

 

[campout]

It's funny -- I applied after reading this post and was rejected. But over the following days PayPal started serving me an ad encouraging me to try to sign up for Working Capital every time I signed in. I ignored it for awhile, and just decided to try it -- and as far as I can tell, they accepted me now, with a maximum loan of $4,500 to start. I didn't take it all the way through to accept the Contract, though, because I'm not convinced it would be beneficial/needed. To do the 30% of sales payback on $4,500 had a fee of $338, which is 7.5% or so.

The interesting thing is when I brought the loan amount down to the minimum $1,000, the 30% fee was only $26 or 2.6%.

I'm hesitant to sign up because I don't want to get limited on how much I'm allowed to take out of my PayPal account. I'm also not sure that I really need it. Were I to pay that $338 fee back in 4 months rather than a year, the effective interest rate jumps way up to 20%+.

On the other hand, in the past year or so that I have been domaining, I have achieved returns far higher than 20%, so logically maybe I should borrow money at nearly almost any cost if I think I can continue to achieve anywhere near the same returns on that new capital...

 

[campout]

I applied again and they only offered me $1,000 this time..

I still haven't taken it for two reasons:

1. I will likely pay the money back fairly quickly, and as a result end up paying an effective interest rate that is quite high due to the quick payback.
2. It could complicate my record-keeping / accounting system.