LoanBuilder: A PayPal Service Review

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Date Established

2006

Location

Wilmington, DE

Pros

• Valid in all 50 states
• Transparent terms & fees
• No up-front fees

Cons

• Inconsistent customer support
• Moderate interest rates

Overview

LoanBuilder is a small business loan service offered by PayPal. Originally a product of Swift Capital, a small business financer, LoanBuilder was folded into the PayPal brand when the payments company acquired Swift in 2017. The LoanBuilder platform is also currently being marketed as PayPal Business Loans.

LoanBuilder offers short-term business loans, a type of interest-free loan in which borrowers repay a pre-determined fixed fee along with the borrowing amount. While many other business financers offer similar funding, LoanBuilder stands out from the pack for a few reasons: the loans are relatively inexpensive, borrowers don’t have to pay an origination fee (or any other up-front fees), and borrower requirements are low.

Most notably, however, is the loan flexibility. As you might expect from a service called “LoanBuilder,” you have the option of customizing your loan by adjusting the loan amount and term length, which affects the borrowing fee and size of the weekly payments. Unfortunately, while potential borrowers used to be able to check potential rates via LoanBuilder’s “Loan Configurator” before providing personal information, now you must fill out a short pre-qualification form to access this feature. Regardless, borrowers have a little more control over loan terms that will work well for their particular business.

Is a small business loan from LoanBuilder right for you? Read on for the details, or check your eligibility below.

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Services Offered

LoanBuilder offers short-term loans, business loans in which you repay a pre-determined fee instead of interest. Business loans from LoanBuilder are fast and easy. To check eligibility, business owners simply need to fill out a short questionnaire online. If prequalified, borrowers can see their estimated terms and fees and adjust the loan amount and term length to their liking.

How Is LoanBuilder Different From PayPal Loan?

LoanBuilder and PayPal Business Loans are one and the same. In fact, you may notice that when you begin the application questionnaire the service is called “PayPal Business Loan” instead of LoanBuilder.

How Is LoanBuilder Different From PayPal Working Capital?

PayPal Working Capital is another business loan service offered by LoanBuilder’s parent company. Like LoanBuilder, PayPal Working Capital offers short-term business loans.

PayPal Working Capital is a useful tool, but it’s only available to PayPal sellers. By contrast, LoanBuilder can be used by most businesses — PayPal sellers or otherwise. LoanBuilder also offers higher possible borrowing amounts, and the amount merchants can borrow is based on the business’s entire revenue (not just its PayPal sales). Check out the next section to see if you have a good chance to qualify for a LoanBuilder loan.

Borrower Qualifications

Below are the minimum requirements your business must meet to have a good chance of qualifying for a LoanBuilder loan:

Your business must also be based in the United States.

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Terms & Fees

Here are the current rates and fees for LoanBuilder loans:

One of the biggest advantages of LoanBuilder is that you can check your eligibility, view the terms of your prospective loan, and customize your offer after filling out a short questionnaire.

LoanBuilder expresses the cost of the loan as a Total Interest Percentage. Determining your borrowing fee is simple — simply multiply the Total Interest Percentage by the borrowing amount. For example, if you are borrowing $100,000 and you have an interest percentage of 10%, you will have a borrowing fee of $10,000. Note that Total Interest Percentage is not the same thing as an interest rate or APR. Unlike interest, which accrues over the life of the loan, LoanBuilder borrowing fees are only calculated once and stay the same for the loan term.

Notably, LoanBuilder does not charge an origination (or similar) fee, so you won’t have anything deducted from the amount of money you receive. Aside from potential late or NSF fees, the fixed borrowing fee is the only fee you will be charged.

Repayment is hands-off. Each week, LoanBuilder will deduct a fixed amount from your business bank account via automated clearing house (ACH). It’s worth mentioning that many of LoanBuilder’s competitors withdraw payments on a daily basis, making LoanBuilder’s system a little easier than most to plan for. You can pay the loan off early if you choose, but there’s no monetary benefit to doing so.

Application Process

LoanBuilder has a quick and easy application process.

The first step is to fill out an online pre-qualification form. You can choose to sign in using your PayPal account (in which case LoanBuilder will already have some of your information), or as a guest. The application has five steps: Contact Info, Personal Info, Business Location, Business Details, and Verify Identity. In all, LoanBuilder advertises that this form only takes five to 10 minutes to complete.

Here is the type of information you’ll have to provide in each step (note that the information might vary based on your type of business, however):

• The first step is Contact Info, in which you must supply contact information, such as your name, email address, phone number, and intended use of the loan proceeds.
• Next is Personal Info, in which you must supply your home address and personal phone numbers.
• For Business Location, you will have to submit your business address and business phone numbers.
• For Business Details, you’ll supply information such as your business entity type, trade name or DBA, state of incorporation, annual business revenue, business start date, number of full-time employees, and business industry and sub-industry.
• On the final section of the loan application, Verify Identity, you will include information such as your date of birth, SSN, percentage of the business you own, and federal tax ID. LoanBuilder will use this information to perform a soft pull on your credit, which will give the lender a sense of your credit history. Supplying this information will not have an effect on your personal credit score.

Apply Online with LoanBuilder

What Happens After I Apply Online?

On submitting the application, LoanBuilder will let you know if you’re been approved to continue the process or not. To determine eligibility, LoanBuilder evaluates your business’s financials and overall health, as well as your personal credit history. If pre-approved, you will be presented with estimated rates and fees, and you will be able to customize your borrowing amount and term length.

When you have settled on your terms, you will have to complete a full application. The documentation required varies based on business, but expect to be asked to submit documents such as recent bank statements. In this stage, LoanBuilder will perform a hard check on your credit, which might have a small impact on your credit score. If approved for a loan, you must electronically sign a contract before receiving your funds.

I Got A Loan From LoanBuilder. Now What?

On approval, WebBank (the bank responsible for originating LoanBuilder loans) will deposit the funds into your bank account. If your loan is approved before 5 PM EDT on Monday through Friday, the funds will generally be transferred the next business day. If you are approved later than 5 PM, or on a weekend, the transfer might take a little longer.

To repay, LoanBuilder will automatically deduct payments on a weekly basis. You will be able to choose the day of the week on which payments are withdrawn.

LoanBuilder Declined My Loan. Now What?

If your loan was declined, LoanBuilder will let you know immediately, and follow up via email a few days later with additional details and reasons. Applicants who didn’t qualify can try again after 30 days have passed.

Sales & Advertising Transparency

LoanBuilder puts most of their cards on the table. In fact, you can find just about all the information you need on the site. Just be aware that, to get the full picture, you’ll need to submit some information.

Customer Service & Technical Support

Customer service is available by phone Monday through Saturday. They are also available via email and social media.

LoanBuilder appears to have recently taken great pains to improve their customer service experience. Their live phone-based support was designated a J.D. Power 2017 Certified Contact Center for “outstanding customer service experience.” Additionally, most users who wrote about their customer experience described it in positive terms.

Negative Reviews & Complaints

LoanBuilder doesn’t have much of its own user profile at the moment — many customer review sites still list them under the Swift brand. Swift is accredited by the BBB with an A+ rating and has a healthy presence on TrustPilot with an aggregated rating of 9.6 out of 10. Here’s a rundown of the complaints against this service:

• Unforeseen Roadblocks: Some customers, either due to miscommunication or mishap, said the experience turned out to be more complex than anticipated.
• Confusing Terms: Though sometimes due to unfamiliarity with short-term loan terminology, some customers found themselves unprepared to meet the terms.
• Short Repayment Terms: Repayment must take place in a maximum of 12 months. That’s not a long time. The weekly repayments will be much higher than they would be if you got a longer term length.

Positive Reviews & Testimonials

Swift Financial, which owned LoanBuilder until recently, has a number of testimonials on their website, a lot of positive reviews on TrustPilot, and a few positive experiences on the BBB. Customers usually like:

• Fast Time To Funding: Despite the costs of doing so, being able to get capital fast has its virtues.
• Helpful Customer Service: For the most part, customers appear to be satisfied with the service and support offered.
• Weekly Repayment Terms. Most MCA and short-term loan providers deduct a portion of your sales every day. For many businesses, weekly deductions are much easier to handle.
• Transparent Fees: LoanBuilder has few surprises as far as fees go, which is somewhat rare for this type of product.

Final Verdict

LoanBuilder’s loans are fast, easy, and a little more flexible than your average business loan. While some borrowers might want to look for a loan with longer repayment term lengths, LoanBuilder has a lot to offer the right type of business. In other words, if your business needs a short-term infusion of capital, or can’t qualify for financing elsewhere, LoanBuilder is worth including in your comparisons.

Get Started With LoanBuilder

• Bio
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Chris Motola

Finance Writer at Merchant Maverick

Chris Motola is a writer, programmer, game designer, and product of NY. These days he's mostly writing about financial products, but in a past life he wrote about health care and business. He's a graduate of the University of Central Florida.

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