Everything You Need to Know About PayPal Working Capital

PayPal has become the biggest name in ecommerce. While the company started off of a platform to support online money transfers as well as an electronic payment system, PayPal now offers business loans for certain customers.

The program, PayPal Working Capital, is a prime opportunity for PayPal business users to get quick access to funding. Here’s everything you need to know about this alternative business lending option.

What is PayPal Working Capital?

If your business offers online payments, chances are you use PayPal. Even brick and mortar companies can use PayPal services through their PayPal Here application. One of the newest options that PayPal has made available is PayPal Working Capital.

The program has been around since 2014 and was created to offer business owners a quick option for obtaining funding. PayPal Working Capital is a loan but works similarly to a merchant cash advance. When you apply for the loan through PayPal, you pay a one-time fixed fee. If you’re approved, daily deductions of your PayPal sales will be applied towards the loan.

With this in mind, this loan is only ideal if you make daily transactions through PayPal.

How to Qualify

Like all loans, there are certain qualifications that you must meet in order to be eligible to apply for the loan. Unlike traditional business loans, PayPal does not check your credit history which means your credit standing doesn’t impact whether or not you’re approved.

To be eligible for this loan you must have a PayPal Business or PayPal Premier account that has been active for at least three months. You must also process at least $15,000 a year if you have a Business account or $20,000 a year for a Premier account.

With the PayPal working capital loan, there are no worries of creating a business plan or worrying about your credit score.

Loan Details

When applying, PayPal charges a one-time fixed fee that is wrapped into the loan amount. The fee is determined by multiplying the buy rate by the principal balance.

For your first loan, PayPal offers a range from $1,000 to $97,000. If you were to get a second loan, the amount is increased to $125,000. Be aware that you can only loan 25% of your annual PayPal earnings. For instance, if your company makes $150,000 each year, the largest loan amount you can take out is $37,500.

Because PayPal Working Capital loans are repaid through daily deductions, they don’t have a set maturity date. But, PayPal does require that you pay no less than 10% of the loan every 90 days. In the event that you fall behind because of a sales slump, PayPal does offer catch up payments.

Benefits of PayPal Working Capital

One of the top benefits of this loan is that applicants receive money quickly. The application process is entirely online, which means no filling out or signing paperwork manually. This speeds up the processing time so that you can get the business capital you need as quickly as possible.

As an added bonus, you receive your funds instantly and they’re deposited directly into your account.

Another benefit of this business loan option is that the fee is inexpensive and the APR is extremely low. Compared to other lenders, PayPal offers very reasonable rates. Last, this loan is beneficial in that the repayment process is entirely hands off. As long as there are funds in your account, you don’t have to worry about setting up an automatic payment or writing a check. PayPal does it for you.

The Down Side

If you’re looking for a huge business loan, PayPal isn’t the lender for you. The PayPal Working Capital loan is capped at $125,000. Unless you use PayPal as your sole source of payments and have a high annual income, the loan amount you’re approved for may be much lower than what you actually need.

While the online application process is nice, we all know that there can be issues. Some applications throw errors or denials, and more often than not, it’s hard to pinpoint why. Be sure you have PayPal contact information handy so that you can.

How to Apply

With a Premier or Business account, you can apply for a PayPal Working Capital loan through your account. The application process is easy as all you need to do is verify financial information, your place of business, and your identity. Since most of this information is already available in the account, the form is pre-populated.

After completing and submitting the form, you will know if your application has been approved or denied. If you’re approved, you can choose a fee as well as a withholding rate. You then agree to the loan terms and the funds are deposited directly into your count – instantly!


If your company uses PayPal for monthly transactions and are in need of business funding, the PayPal Working Capital loan is worth looking into.

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