PayPal Working Capital Loans Review 2022

PayPal offers businesses a convenient way to accept payments from customers around the world. Small business owners who use PayPal will often be offered financing directly from PayPal. Here’s how it works.

What is PayPal Working Capital?

If you’ve had a PayPal Premier or Business account for at least 90 days, you may be asked to apply for PayPal Working Capital, a short-term business loan offered directly by PayPal.

PayPal Working Capital Features, Pricing, and Terms

The amount you receive will be based on your PayPal account history. You will repay your PayPal working capital loan by designating a percentage of future PayPal sales for repayment.

The cost of a PayPal working capital loan is expressed as a flat fee, not an interest rate. This makes the overall cost clear, but can make it difficult to compare the cost with other types of financing such as bank loans or business credit cards that use an annual percentage rate of charge to describe costs.

PayPal does not disclose exact refund terms until you request them. It indicates that the repayment fee will be based on your business’ PayPal sales history, your loan amount, and the repayment percentage you choose. The higher the payout percentage you choose, the lower the fees.

When choosing your cashback percentage, keep in mind that payments will be taken from future PayPal sales, and higher cashback percentages can impact your cash flow. Remember that PayPal fees will also reduce the net amount you receive.

If approved, you can be funded immediately, then as you make future sales through PayPal, the loan fee will be taken from future sales at the agreed payout percentage until the balance is paid off .

There is no penalty for early repayment and you are free to make additional payments if you wish.

Advantages and Disadvantages of PayPal Working Capital


  • Quick approval
  • Immediate funding
  • No personal guarantee
  • No credit check
  • Reduced payments when sales are lower
  • Clear refund amount

The inconvenients:

  • It can be difficult to calculate the interest rate
  • The cost may be higher than other types of financing
  • Unpredictable payments can impact cash flow
  • Minimum payment required every 90 days

How to Qualify for PayPal Working Capital

Eligibility is quite simple. To qualify for a PayPal working capital loan, you must have a PayPal Business or PayPal Premier account open for at least 90 days. You must process at least $15,000 in annual PayPal sales if you have a PayPal Business account. For those with the Premier Paypal account, this minimum is increased to $20,000.

Application process

The application process is simple as long as you meet the qualifications. You apply online in your PayPal account. PayPal says you can be approved in as little as five minutes if you meet the requirements.

Some business owners may be asked to provide additional information such as contact information for other business executives.

Applying for a PayPal Working Capital loan does not require a good personal credit score, as there is no personal credit check or business credit check.

You cannot have an existing PayPal working capital loan. If you do, you’ll have to pay it back before asking for another one.

PayPal Working Capital Comparison with Other Lenders

Like many types of online financing, PayPal Working Capital offers a much simpler application process than traditional bank loans. Because PayPal has information about your PayPal sales, the application process is quick and easy.

However, this speed can come at a cost. This type of financing can be more expensive than other loans or lines of credit. It is very similar to a business cash advance or a merchant cash advance.

The biggest downside is that it’s hard to understand how much you’ll pay in terms of interest rates, making it difficult to compare the cost with other types of financing your business might be eligible for. You may find that you will pay more than you could if you were looking for financing.

PayPal Working Capital Alternatives

Other types of business financing that may offer comparable funding velocity include:

  • Business credit cards
  • Factoring invoice
  • Business cash advances
  • Online lines of credit

Eligible businesses can consider loan options that can offer lower monthly payments and interest rates, including microloans, term loans, or even SBA loans.

Nav’s Marketplace makes it easy to find small business loans and other financing options based on your qualifications.


Is working capital from PayPal considered income?

PayPal Working Capital is a type of loan and loans are not considered income unless they are not repaid. If your business defaults on a business loan, it may at some point be considered income and result in a tax liability.

Is PayPal working capital the same as a PayPal business loan?

No. The PayPal business loan is a product offered by Webbank. You will complete a questionnaire to assess your eligibility and answer questions about your business as well as personal information such as your social security number. If you then decide to apply, there will be a personal credit check which may impact your credit score.

What if you can’t get a PayPal working capital loan?

If you don’t pay your PayPal loan, you may be in default. If this happens, PayPal may require the entire loan to be due immediately. Your account may be subject to collections and/or legal action.

This article was originally written on May 5, 2022.

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