PayPal Working Capital Reviews — Easiest Loans Online?

Who Is PayPal Working Capital For?

As our PayPal Working Capital reviews are going to show you, this platform is excellent for PayPal-based businesses that need quick and simple loans for covering payroll, seasonal dips, etc., but you don’t want to go through credit checks or never-ending, strenuous approval procedures. 

Instead of your credit score, your loan approval (as well as its amount) depends solely on your PayPal history.

When we said PayPal Working Capital is one of the fastest platforms out there, we really meant it. You can get the funds you need literally in a matter of minutes, which makes it an excellent option for those who need cash REALLY fast!

However, though this is definitely one of the fastest options out there, some would argue that it’s possibly not the smoothest one. Several complaints relate to the customer service and a hard-to-figure-out approval process. 

Additionally, fees can often get pretty high, meaning it‘s recommendable to do the math before actually opting for a loan to make sure this would be a worthy financial move for you.

What Is PayPal Working Capital?

We all know about PayPal, an American online payment system founded in 1998, but not many of us have heard about the company’s working capital loan service called PayPal Working Capital. 

So, let’s find out more about it! 

PayPal Working Capital was launched in September 2013 as a service intending to help online sellers grow their businesses with ease. In the beginning, it was restricted to the US only, and it offered loans of a maximum of $20,000. 

Since then, PayPal Working Capital significantly expanded, becoming a fully-fledged business service, extending its operations to the UK, Australia, and Germany. 

Nowadays, PayPal Working Capital offers working capital loans of up to $125,000, allowing you to repay them as you get paid.

It charges only a one-time fixed fee (expect to repay $0.01–$0.58 in fees for every dollar you borrow) with no hidden fees whatsoever. Repayments are regularly deduced from your PayPal sales in previously agreed amounts (10%–30% from your PayPal sales). 

PayPal Working Capital Reviews often compare PayPal Working Capital services to a merchant cash advance. And while they do operate similarly (especially when it comes to the repayment method), there are significant differences between the two. 

PayPal Working Capital is more akin to a short-term business loan, and you can’t sell on future receivables the way you would with a merchant cash advance.

The Application Process

As mentioned earlier, one of the strongest points of this service is its speed. Applying for a working capital loan is a straightforward process that involves filling out a single application, which you can access through your PayPal account.

All you need to do is verify your identity and the location of your business, as well as provide some financial info. PayPal pre-fills most of the fields for you based on your account data, so all you do is check whether the information is correct. 

After this, you just have to let the PayPal Working Capital algorithm do its magic and wait to find out whether you’re denied or approved.

According to client experience, the loan approval process tends to be a bit inconsistent, and there’s a slight chance you won’t get the funds you need though you think you meet all criteria. 

In that case, you may encounter several PayPal Working Capital error codes: 

• Identification Error (your information couldn’t be verified) 
• Error Code 641 (sales holds/pending balance on your account)
• Error Code 646 (abnormal sales)
• Error Code 650 (sales volume fluctuations)

In the event of this, it’s best to contact customer service to identify the reason behind the issues and get the proper instructions on resolving them. 

According to many a PayPal Working Capital review, some error codes can be resolved simply by trying to reapply, while others require more work (e.g., bumping up your sales, etc.).

After you’ve been approved for a loan, you’ll need to enter the desired loan amount (the maximum amount for your first loan is $97,000 and climbs to $125,000 for every subsequent loan. 

You’ll also have to choose the repayment percentage (which can range between 10% and 30% of your PayPal sales). 

Once you’re done with that, the platform will calculate the estimated repayment period (the maximum being 18 months).

Then, you’ll be presented with the loan terms, which you should study thoroughly. 

Finally, WebBank, the company’s partner, will deposit the funds directly to your PP account, which will be available to you immediately. 

Key Features

So, now that we’ve gotten familiar with the essentials of the company and its services, it’s time to take a closer look at the actual loans and their essential features.

Loan Amount

PayPal Working Capital maximum loan amounts to $97,000 for the first-time lenders and $125,000 for every subsequent loan. 

Fees

PayPal Working Capital charges only one fixed fee that depends on your loan amount, PayPal sales history, and agreed repayment percentage (if your repayment percentage is higher, the costs of your fixed fee will be somewhat lower and vice versa). 

There are no periodic interest rates, hidden fees, additional repayments or late fees of any kind.

Repayments

PayPal Working Capital will wait for only 3 days after approving the loan before it starts the repayment process.

Repayments are automatically deducted from your account until the debt is paid in full, and they range from 10% to 30% of your daily PayPal sales. All you have to do is choose the right percentage for your business.

The repayment amount is flexible, it changes with each sale, and you don’t pay anything on days you made no sales. Still, there’s a minimum repayment amount that has to be made every three months. 

The minimum repayment amount totals 5% of your total loan amount (for loans estimated to be repaid within 12 months or more) or 10% of your total loan amount (for loans estimated to be repaid within 12 months). 

Therefore, these loans can be more expensive to repay than traditional bank loans with fixed interest rates and traditional annual percentage rates of under 10%. 

So, if you have a good credit score and a well-established business that’s able to provide collateral, you might be better off considering the more old-fashioned way of getting a loan.

PayPal Working Capital Interest Rate

Unlike other loans, PayPal Working Capital doesn’t impose interest rates. As mentioned above, the repayment is based solely on one fixed fee. 

The Total Number of Loans You Can Get

You can get only one PayPal Working Capital loan at once. After you‘ve repaid the first one in full, you‘re free to apply for another one.

PayPal Working Capital Requirements

To be eligible for applying for a PayPal Working Capital loan, you have to:

• Have a Premier or Business PayPal account that’s at least three months (90 days) old.
• Generate at least $15,000 in annual sales on your Business account.
• Generate at least $20,000 in annual sales on your Premier account.

Error Codes and Denials 

Was your PayPal Working Capital declined in 2020 (or any time, really)? You’re not alone. Many reviewers mention getting various error codes on their screens upon trying to apply for a working capital loan.

Some of the reasons why these errors occur and interfere with your application include:

• The system’s inability to verify your info
• Sale holds/pending balance (Error Code 641)
• Applying for a new loan too soon (less than three days) after repaying the previous loan
• Abnormal sales (Error Code 646)
• Your business belonging to a high-risk industry
• Being unrealistic about the amount of money you want to borrow

After resolving these issues, you can take another shot at PayPal Working Capital, apply again and wait for a better outcome. 

Denials and error codes 646 (abnormal sales) and 641 (sales holds or a pending balance on your account) can be a true hassle, and to tackle them, you need solid customer service.

Customer Service

Unfortunately, customer service is often inconsistent. One of the reasons for this is that loan approval is completely automated, and there’s little customer service staff can do to help you out with it. 

However, contacting them can sometimes prove helpful in identifying the reason behind the errors and resolving them, so it’s definitely worth a try!

You can reach PayPal by phone (Monday to Friday from 8 am to 8 pm) or via email. The company is also fairly active on social media (they also have a Twitter dedicated mainly to customer assistance).

Additionally, there’s a large online community on PayPal Working Capital forums. 

According to many a review of PayPal Working Capital, the forums are often helpful, as chances are someone ran into the same problem you’re encountering before, so they’re definitely worth checking out!

The Verdict

All in all, PayPal Working Capital can be a great option for PayPal merchants looking for quick, no-hassle funds. It can be a rather convenient way to get and pay off a loan, as your loan is automatically deducted from your PayPal sales. 

Also, the funds can be available literally within minutes. All these features can make it a highly enticing deal for most merchants. 

What’s more, the company doesn’t hesitate to show dedication and even generosity towards their clients in times of need.  

To illustrate, we’ll mention what PayPal Working Capital did during the coronavirus outbreak. It suspended working capital loan repayments for 30 days to assist its clients in times of crisis. 

All in all, there’s a lot to like about the service, but it’s not without flaws, which are mainly associated with the unpredictable application process and high repayment rates.