PayPal Working Capital

PayPal Working Capital Loan Review [2022 Pros & Cons]

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PayPal Working Capital

PayPal, already one of the biggest eCommerce services in the world, has increased the range of its services through its PayPal Working Capital lending service. PayPal Working Capital services are aimed at the small business market and are intended to help smaller companies meet their funding requirements. PayPal launched its Working Capital services in 2014 and since then, the service has become an easy way for many small businesses to ensure they have the funding required to meet their growth needs in 2022.

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PayPal Working Capital Review

PayPal Working Capital Loan

PayPal Working Capital loans offer fast and easy access to much-needed working capital through short-term business loans,  similar to merchant cash advances.  The service offers loans to small businesses who have a PayPal business or premier account and have a strong sales history of 3 months or more. 

PayPal uses WebBank as a banking and lending partner for its Working Capital Services; WebBank will ultimately determine whether you are eligible for a PayPal Working Loan or not. 

Loan repayments are simple: the service deducts a percentage of each sale you record from your PayPal business or premier account until the loan’s balance is paid in full. PayPal also allows you to make manual payments towards your loan using either your PayPal balance or a verified linked bank account.

One of the biggest advantages of PayPal’s working capital to PayPal users is that it offers a widespread payment of the loan over some time at a percentage decided by the user, this convenience is the biggest strength held by the platform.

Looking for fast and flexible business funding? Check out Divvy’s lines of credit.

PayPal Working Capital Review

The PayPal Working Capital service offers loans to small businesses who have a PayPal business or premier account and have a strong sales history of 3 months or more.

PayPal’s banking and lending partner is WebBank who will ultimately determine whether you are eligible for a PayPal Working Loan or not.

The repayment of the loan is simple with a percentage of each sale automatically deducted from your account until your balance is paid in full. PayPal also allows you to make manual payments towards your loan using either your PayPal balance or a verified linked bank account.

Let’s continue with a more detailed look at this service with our PayPal Working Capital review.

Eligibility Requirements

There are no minimum credit score requirements for a PayPal Working Capital loan; in fact, PayPal doesn’t access your credit history at all during the application process. PayPal also does not require any collateral on the loan; these and more make PayPal working loan capital the fastest and easiest loan for businesses. You get the pleasure of having your loan disbursed to your account in minutes after you’re done applying.

However, all eligible borrowers must be existing PayPal users with either a premier or a business account.

Also, the business applying for the loan must be at least three months old with either a $15,000 total annual sale or a $20,000 sale. What makes these monetary benchmarks unique is they hold the prize for being the cheapest monetary requirement amongst other working capital loan companies, with some companies requiring applicants to be in business for at least five years and have an annual sale of $150,000.

Additionally, applicants must live in either the United States, Australia, Germany, or the United Kingdom, and they must have paid off any previously existing  PayPal Working Capital loan 3-5 days prior to the current application.

Business age: 3 months
Credit Score: Not Applicable
PayPal Revenue: Premier accounts: $20,000 annually, Business accounts: $15,000 annually

PayPal Working Capital Apply

Terms & Fees

PayPal Working Capital Loan Amount

PayPal Working Capital lends money to a maximum of 25% of a borrower’s annual PayPal revenue. For example, if your PayPal revenue is $100,000, then you will be eligible for a loan of up to $25,000. The first loan from the service is capped at a maximum of $97,000 and any subsequent loans can be up to $125,000. 

As stated earlier, repaying a PayPal loan is straightforward. The service deducts a percentage from your daily sales until your loan is repaid in full. If, for example, your loan takes more than 12 months to pay off then you will be required to pay a minimum of 5% every 90 days. However, if your loan can be paid off within 12 months then you will be required to pay at least 10% of your loan every 90 days. 

PayPal Working Capital also charges a one-time fixed fee which is calculated by applying the factor rate to the amount you have borrowed. Factor rates are not to be confused with interest rates, as they are different. For example, if you borrowed $100,000 at a factor rate of 1.15 then you will have to repay $115,000 regardless of how long it takes you to pay it back.

  • Borrowing Amount: Up to $97,000 for the first loan, Up to $125,000 for subsequent loans
  • Term Length: Up to 18 months
  • Factor Rate: Between 1.01 and 1.58

PayPal Interest and Cost Per Dollar Borrowed

PayPal offers loans at a very high interest rate; this is partly caused by the leniency offered by the platform in registration. PayPal offers loans with a whopping $1.04 to $1.55 cost per dollar with additional interest rates. 

PayPal Loan Repayment 

Repaying loans on PayPal is as easy as taking them. The flexibility offered by the platform is overwhelming; applicants get to choose how much percentage they would pay from their income. For instance, if a business makes a monthly income of $2000, the business is free to decide if it is 10, 20, or 30% of its earnings it wants to put towards the repayment of the loan.

Also, PayPal allows you to repay the loan in a space of 18 months; so, basically, it’s left for you to choose what suits you, you can repay in 3 months, 12 months, or stay on till the 18 months. You also have the option of paying your loan daily, weekly, or monthly.

Small Business Funding

PayPal Working Capital Loan Calculator

The fee calculator below is based on a $25,000 working capital loan from $100,000 in annual PayPal sales. When offering you the working capital loan, PayPal will ask you what percentage of your sales you want to be deducted from your sales each day.

As you can see from the graph, the higher the repayment percentage, the lower the fixed fee; conversely, if you opt for a lower repayment percentage, you will be charged a higher fixed fee.

Repayment percentageFixed feeTotal repayment

Application Process – Apply For PayPal Working Capital

The application process for the PayPal Working Capital service is simple and straightforward. PayPal account holders can apply through their PayPal account. The online application form will already contain the credentials you provided when you first registered with PayPal, so you just need to check these credentials to make sure they are current and click the submit button. The application process is automated, so you will know if your application has been accepted or rejected instantly. 

If your application is approved, you will get to choose your fee and the rate at which the daily deductions are made. Ensure that you take into account that the loan factor rate fee and daily deductions are inversely related. So, if you choose low daily deductions then you will have to pay a higher factor rate, and if you choose a low factor rate then you’ll have higher daily deductions. If everything works smoothly, PayPal will deposit funds from the loan immediately upon approval of your application.

Apply for PayPal Working Capital:

PayPal Working Capital loan application page.

PayPal Application Errors

The PayPal Working Capital service relies heavily on web-based automation, and there have been times when people have complained of technical errors; from time to time these technical glitches have prevented people from successfully completing the application process.

The  PayPal online community has cited systemic problems with the site creating errors during the application process which render the applicant’s information unidentifiable. In order to avoid these technical errors while applying,  past users recommend double-checking your address and other details to make sure they are in a format the system can recognize.

Additionally, some borrowers have reportedly experienced credit errors while applying, even though they have a perfectly good credit record. The only thing that seems to rectify this is to re-submit your application as necessary. The system is automated and there is no penalty for multiple submissions. Many successful loan applicants have reported that simply by applying again they have been able to bypass this credit error.

It should be noted that PayPal does NOT do a credit check when you apply and your application does not affect your credit record in any way unless you default on the loan and fail to repay the agreed amounts on time.

To apply, go to the PayPal Working Capital login and application page, click on the “apply now” button and follow the prompts.

PayPal Working Capital Second Loan Wait 3 Days

Once you have paid off your first loan, PayPal advises waiting 3 – 5 days before applying again for a second loan through their service. This gives the system time to process any lagging payments you’ve made and to finalize your existing agreement. You will receive an email from PayPal letting you know your existing loan is closed, and then you can apply again. Finalizing your final payment can take anywhere between 72 hours and 5 days, depending on whether or not you have made a manual bank payment.

PayPal Working Capital Declined Second Loan

Some users report receiving denial error codes like DLGJ0656, DLGJ0711, and 650 after applying for their second loan. There are a few reasons your application could be declined:

● Incorrect information in the application

Your company information has changed

● Applying too soon after paying off an existing loan

Information cannot be verified

● Inconsistent sales

Trading in a high-risk industry

Pending transactions or limitations on your account

The best way to make sure you are approved for any PayPal Working Capital loan is to make sure all of your information is up to date and correct before you apply.

Just because your application was declined doesn’t mean you don’t have options. There are alternatives available to you depending on your requirements:


  • Shopify Capital: If you run an eCommerce store on Shopify you may be eligible for a merchant cash advance.
  • Clearco: Clearco offers merchant cash advances to businesses in the eCommerce, Mobile Apps With In-App Purchases, Marketplaces, Subscriptions, or consumer Software as a Service (SaaS) sectors with over $10,000 in monthly revenue.
  • Amazon Lending: Amazon Lending offers short-term loans to Amazon sellers.
  • OnDeck: OnDeck provides short-term loans and lines of credit to businesses with 12 months worth of trading.
  • BlueVine: BlueVine is an online business lender offering lines of credit, invoice factoring, and term loans.
  • Lendio: Lendio is a business funding matchmaker.
  • Fundbox: Fundbox products include lines of credit and invoice factoring.
PayPal Working Capital Declined Second Loan
PayPal Working Capital Declined

Customer Service

PayPal customer service can be reached through:

● Phone 

● Email

Social media platforms

However, because the PayPal system relies so heavily on automation, many users report that the customer service team is often unable to provide timely support when there is an issue with an application or an existing loan account. 

PayPal Working Capital contact number: 1-877-981-2163

Can You Have More Than One Loan At A Time?

PayPal Working Capital allows only one loan at a time. However, the service encourages you to apply for another loan once the existing loan is fully paid off.

PayPal Working Capital Loan

PayPal Working Capital Reviews & Complaints

Although PayPal has a poor rating on Trustpilot following a rating of 1.2 from over 17,000 users, PayPal still maintains a reasonable reputation in the market, and users are generally satisfied with the PayPal Working Capital service as well. However, there are a few issues that come up when you search through PayPal Working Capital loan reviews.

Most of the complaints registered are based on the aforementioned technical issues with the loan application and approval process. Additionally, some users have cited the low borrowing limit, and the lack of an early payment redemption scheme as subpar as well. 

Another issue that past users have reported is PayPal’s aggressive stance on overdue payments.  Some merchants have reported that PayPal sold their loans to debt collectors over amounts as little as $20, without even contacting them to address the default payment. If you are concerned with a consistent ability to generate sales to service a loan, you should definitely take this into account before using PayPal loan services.

From the PayPal website: 

“If you don’t meet the minimum repayment amount, your entire loan balance could become due immediately.”

To address some of these shortfalls, the PayPal Working Capital dashboard now displays the amount you have paid and the minimum you need to pay each month to avoid defaulting. This enables users to clearly see if they need to top up their loan repayments in the event sales have declined, and they aren’t meeting the minimum payment requirements.

PayPal Reviews
PayPal Reviews

PayPal Working Capital Alternatives & Competitors

There are a few competitors and alternatives to PayPal Working Capital you should consider:

PayPal Working Capital Pros and Cons


  • Fast service
  • Reliable and hassle-free
  • Quick application time
  • Quick transfer of funds
  • The repayment process is easy 
  • Automated system with no paperwork
  • No credit check
  • No collateral required
  • Those with strong sales and bad credit are most often approved
  • No late fees or penalties for early repayment or one-off repayments


  • Fees can sometimes be quite high
  • No incentive to repay the loan early
  • Only small amounts available 
  • Poor customer service
  • Errors, bugs, and platform issues
  • No boost to your credit score
  • Only available to PayPal business or premier users

PayPal and Other Working Capital Lenders

Other Traditional Lenders and PayPal Working Capital 

Traditional lenders should be the first point of call for small business lenders looking for lesser interest payable on loans. These lenders offer small and sometimes large loans with the smallest interest and fees payable on them. But don’t be too quick to patronize traditional lenders, they conduct a lot of due diligence on borrowers, require several investigations, and sometimes collateral; this makes it slow and difficult to access loans from traditional lenders.

The low rates offered are guided by the lesser risks involved because proper diligence is done on borrowers, the borrower that has the strongest profile is given the loan. 

For PayPal, its biggest merit against traditional lenders is offering loans with little or no eligibility requirement and can have the loan repayment spread.

Kabbage Vs PayPal Working Capital

Kabbage is another loan company, but in this case, there is a lot of similarities shared between Kabbage and PayPal Working Capital loans. Both companies offer loans at high interest and fee rates, they also offer at little or no eligibility requirements. Nonetheless, a difference lies in the fact that applicants on Kabbage need not possess a previous account on the platform as is the case with PayPal Working Capital. Also, Kabbage offers a maximum of $250,000 with much higher fee rates than PayPal’s working capital, while PayPal’s Working Capital offers a maximum loan of up to $200,000. 

Square Capital Vs PayPal Working Capital

Square Capital functions similarly to PayPal’s Working Capital in almost all folds. Both platforms offer loans to businesses that have used their platforms for transactions in the past. There is also the existence of fewer or no eligibility requirements before accessing the loan. Both platforms also offer their loans at a high fee and interest rate. However, PayPal’s Working Capital leverages the functions of Square’s Capital because PayPal offers larger loans and a longer spread to pay up the debt. This feature makes PayPal’s Working Capital a preferable option for seeking a loan than Square Capital.

Fundation Vs PayPal Working Capital

Fundation holds the lead for the loan app with the best features and deals. The platform offers small and medium loans from $20,000. The platform conducts better diligence on the borrower, so, there is a bit of time wasted in identifying whether or not the borrower is capable of paying up.

Another area where Fundation is better than PayPal is in the spread to pay the loan; while PayPal offers 18 months, Fundation offers 3 to 4 years for repayment. PayPal’s Working Capital takes the lead against Fundation when it comes to receiving the loan applied for, while it takes PayPal less than 10 minutes or less, it takes 1 to 3 days to receive the loan from Fundation.

Frequently Asked Questions (Faq)

How does the PayPal Working Capital algorithm work?

The PayPal Working Capital algorithm is calculated in a few ways:

  • Your account history
  • Your identity
  • PayPal sales
  • The age of your account
  • Compliance issues

How do I apply for PayPal Working Capital?

To apply for a PayPal Working Capital loan, go to the website and apply online.

What is the PayPal Working Capital maximum loan amount?

The first loan from the service is capped at a maximum of $97,000 and any subsequent loans can be up to $125,000. 

What is the PayPal Working Capital phone number?

The PayPal Working Capital contact number is: 1-877-981-2163

Does PayPal Working Capital check credit scores?

No, PayPal does not perform a credit check on applicants applying for a working capital loan.

How to check PayPal Working Capital balance?

To check your PayPal Working Capital balance, you simply log into your PayPal account and click on the PayPal Working Capital title on the left. You’ll then be taken to a page showing your balance.

Parting Thoughts: A Good Service for Small Businesses

Is PayPal Working Capital a good idea? PayPal Working Capital loans can be very useful for providing small businesses with modest amounts of immediate funding for their working capital needs.  The rates on these loans are low and repayment is relatively easy as well. Additionally, the application and approval process for a PayPal Working Capital Loan is much faster than a traditional lender.

If you are looking for large loans with little eligibility requirement, then PayPal’s Working Capital loan is for you. You get the freedom to choose whatever percentage you can undertake in settling the loan. Also, the spread of 18 months is a huge break for businesses looking for loans that wouldn’t affect their everyday finance.

Additionally, the loan amount offered follows 25% of your annual earnings on PayPal, this makes it easy for you to settle all debt owed to the platform. All these and more are the reasons why PayPal’s Working Capital loan is a suitable loan company to do business with.

Apply For A Working Capital Loan

Check your eligibility.


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