LoanBuilder: A PayPal Service Review
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- Date Established
- 2006
- Location
- Wilmington, DE
Pros
- Borrower qualifications are lower than banks
- Low credit score requirements
- No extra fees
- The application process is fast and easy
- Funds get disbursed quickly
Cons
- Not available to businesses in some industries
- No discounts for repaying early
- No long-term financing options available
- A blanket lien is required
Overview
LoanBuilder, a direct lending service offered by PayPal, bills itself as a quick, easy, and transparent way for businesses to borrow. LoanBuilder is based out of Wilmington, DE, with Utah-based WebBank providing the loans.
LoanBuilder offers short-term business loans, a type of interest-free loan in which borrowers repay a predetermined fixed fee along with the borrowed amount. While many other business financiers 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 upfront fees), and borrower requirements are low.
Is a small business loan from LoanBuilder right for you? Read on for the details.
Table of Contents
Services Offered
LoanBuilder offers short-term business loans in which you repay a predetermined 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. At one point there had been plans to phase out the LoanBuilder brand name, but that hasn’t happened yet.
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 provides 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
LoanBuilder has pretty relaxed borrower qualifications, but its list of ineligible industries is rather lengthy and includes attorneys, nonprofits, financial services, and others. Below are the minimum requirements your business must meet to have a good chance of qualifying for a LoanBuilder loan:
| Time In Business: | 9 months |
| Business Revenue: | $42,000 per year |
| Personal Credit Score: | 620 |
Your business must also be based in the United States. Additionally, you must not have any active bankruptcies.
Terms & Fees
Here are the current rates and fees for LoanBuilder loans:
| Borrowing Amount: | $5,000-$500,000 |
| Term Length: | 13-52 weeks |
| Borrowing Fee: | One-time fee of 2.9%-18.72% of the borrowing amount |
| Origination Fee: | None |
| Effective APR: | Learn more |
| Collateral: | UCC blanket lien |
LoanBuilder borrowing fees are usually not too high. However, the loans have relatively short repayment terms, making for large weekly payments. On the positive side, rates and terms are refreshingly transparent, with no hidden fees.
One of the main 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 easy — 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. In total, you would have to repay $110,000. Note: the 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’s 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. As for LoanBuilder’s borrowing fees, they are not expensive, but they’re not the cheapest either, and could potentially be as high as 18.72% of the borrowing amount. The repayment term is pretty short, with a maximum term of 52 weeks, which means that it’s not a viable long-term financing option, and each weekly repayment will be significant.
Repayment is hands-off. Each week, LoanBuilder will deduct a fixed amount from your business bank account via an automated clearing house (ACH). It’s worth mentioning that many of LoanBuilder’s competitors withdraw payments daily, making LoanBuilder’s system a little easier than most to plan for. You can pay the loan off early without penalty if you choose, but unfortunately, there’s no monetary benefit to doing so.
LoanBuilder does not require any specific collateral, but like many online lenders, LoanBuilder does require a UCC-1 blanket lien.
Application Process
Rating: Excellent
LoanBuilder has a quick and easy application process.
The first step is to fill out an online prequalification 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 ten 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):
- 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 relevant 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, what percentage of the business you own, and your 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 affect your personal credit score.
What Happens After I Apply Online?
On submitting the application, LoanBuilder will let you know if you’ve 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 preapproved, you will receive 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 your business’s situation, but you should expect to submit various 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 transfer the next business day. If you are approved later than 5 PM, or during a weekend, the transfer might take a little longer.
To repay, LoanBuilder will automatically deduct payments every week. 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 gets declined, LoanBuilder will let you know immediately, and it will 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
Rating: Excellent
LoanBuilder puts most of its 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. Support is also reachable via email and social media. There is no live chat feature, however.
Though customers in the past have complained about the difficulty of reaching a customer support representative, LoanBuilder appears to have taken great pains to improve its customer service experience, and most recent reviews of the company’s customer experience are positive. Additionally, its live phone-based support was designated a J.D. Power 2017 Certified Contact Center for “outstanding customer service experience.”
User Reviews
Overall, LoanBuilder enjoys a mostly positive reputation online.
Negative Reviews & Complaints
As a PayPal service, it’s difficult to disambiguate PayPal’s loan services from all their other operations. Before being absorbed by PayPal, LoanBuilder was a product of Swift Capital, LLC, which is technically still the entity that services the loans. Swift isn’t accredited with the BBB, but has an A+ rating on the site. It also has a healthy presence on Trustpilot with a 4.9/5 score with 5,316 reviews. Still, there are some negative reviews out there. Here’s a rundown of the complaints against this service:
- Unforeseen Roadblocks: Some customers, either due to miscommunication or mishap, said the application and funding experience turned out to be more complicated 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 more extensive term length.
- COVID-related Issues: Many of the more recent complaints involve difficulties repaying during the 2020 global pandemic, as well as confusion surrounding PPP applications.
Positive Reviews & Testimonials
LoanBuilder has several testimonials on its website, a lot of positive reviews on Trustpilot, and a few positive experiences on the BBB. Customers usually like the following:
- 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. With the current FICO score requirement of 620, however, LoanBuilder is starting to edge into “premium” loan territory, at which terms and rates become more competitive. That’s not to say LoanBuilder isn’t still a pretty good deal as fast online loan products go, only that you’ll probably want to weigh your other options if you meet LoanBuilder’s qualifications.
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 you can’t qualify for financing elsewhere, LoanBuilder is worth including in your comparisons.
Erica Seppala
Erica is a writer based in Greenville, South Carolina. She is a graduate of Limestone College. Initially determined to be an accountant, she put away the calculator and picked up a laptop to pursue her dream of being a writer. Erica has spent the past 10 years writing blogs and articles for hundreds of private clients, and she loves sharing her love of research and the written word with everyone around her.
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DO NOT APPLY FOR PPPL with them – paypal should be ashamed the loanbuilder loan wastes your time and is obviously NOT interested in providing PPPL to small businesses.They have you provide them private personal business and tax records only to tell you that you only qualify for loans that are x% or that your credit score is not good enough.PPPL rules do NOT allow determination of loan based on credit.PPPL is a 1% loan that may be forgiven not 3-5% loan.We’ve seen several clients WASTE their time with this PAYPAL advertised PPPL lender WHEN they are obviously NOT interested in following the rules and providing PPPL based loans.At the worse possible time – PAYPAL and loanbuidler FAIL the small business community that they should be supporting. In my opinion it couldn’t be worse. I will NOT be using PAYPAL in future if I can at all avoid it and we should ALL seek accountability for their failure during this crisis.THANK GOOD I know other financial institutions that will complete this type of loan as required by PPPL.I will also have to monitor the Merchant Maverick (small business made easy) BECAUSE what I’ve seen is NOT making small businesses easy at all!Du Alentdualent@gmail.com
Hi Du,
No specific credit threshold has been stipulated, however, there’s nothing in the rules that forbids lenders from checking credit and it makes sense that they would. Payment history and derogatory remarks, delinquencies, judgments, etc., will be considered. So it’s possible that if a client of yours had an unsatisfactory payment history, the lender may not be willing to offer a PPP loan, and thus offered an alternative at a higher interest rate. Approval is not guaranteed, unfortunately. We do work tirelessly to provide accurate and unbiased information to the small business community at no charge, in an effort to provide information to business owners so they can make smarter business decisions. I’m sorry you had a negative experience with Paypal – you aren’t alone! There are many options out there, and what works wonders for some, will fail miserably for others, unfortunately. If your clients are still looking for funding, we have a great resource on PPP /EIDL alternatives that may be helpful.
We’re on your side and wish you the best!
Terrible Company. my business suffered from covid-19 and i applied with paypal loanbuilder . they approved me and i signed the documents after a week the emailed me saying they don’t cover this industry. unbelievable wasted my time. beware of this company. they just want your information and then decline you. my score is 735 so its not that. go with your local bank and don’t use them.
Organization Name: Exodus Design
I do business with PayPal all the time. They have been my “goto” for years. However, I applied for the PPP loan through their recommendation and partnering with web bank/loanbuilder. I filled out all the info, uploaded all my documents. Waited. Was denied based on my credit score of 661. They also noted I “Did not supply information requested”. I was NOT notified or contacted to supply them with additional info.My credit records has my STUDENT LOAN which paid off in full, but had 3 late payments back in 2014 and a LEGALLY PAID IN FULL account, which I paid off in 2019, $5000 on $5500. That is why I was denied. THIS PPP supposed to be guaranteed by the government. WHY so harshly denied???? I am VERY upset at this.
Organization Name: River Arc Ltd Co
I applied for the PPP through Loan Builder. I received an email from Loan Builder on Documents they needed. Drivers License, certificate of Business Certificate and payroll calculator and verification documents and copy of bank statement. I uploaded all the documents.A couple days later I go to check on status and Loan builder says I have no open loan applications.Since I have sent several emails asking about what has happened with no reply.Unbelievable and so disappointing. Small businesses are starving, unable to pay their bills and this is the treatment we get. I have wasted 2 weeks depending on LoanBuilder. Go somewhere else if you are in need of funding. I give them an F
Organization Name: 3solutions llc
Nothing but a loan process, using the wording of sba ppp application, BS..
I suggest NOT wasting your time utilizing Loan Builder for Covid-19 PPP Paycheck Protection Program.On the same day, I applied through 2 sources (Square Capital and PayPal Loan Builder) for the Pandemic Federal Assistance Program, PPP for paycheck protection.I have been approved through Square, forwarded to the SBA which is now in the process of finalizing my request.At the same time, PayPal Loan Builder for PPP Program, sent me an e-mail that they were “unable to verify my identity” yet, further in the e-mail, provided me with my personal credit score in the e-mail as well as notified me which site they utilized to pull my business credit. A direct contradiction, because if you weren’t able to verify my identity, then what type of reckless and fraudulent process did you take to move forward with pulling credit? If you can’t verify me, then why did you pull both personal and business? And by the way, this is supposed to be a business driven program, and has nothing to do with credit personally. And, businesses that follow the rules will actually have this translated into a grant.I suspect that PayPal is adding criteria on top of the government’s qualifications, and like banks did with round 1 funding a couple weeks ago, they are personally picking who they want to distribute funds to. I’ve already notified the Consumer Finance Protection Bureau (CFPB), the Better Business Bureau (BBB), Governor Ducey, and Greg Stanton with the House of Representatives. I was also one of the leads in our small business group that managed to get a story published on CNN about the handpicking of clients by banks. I’ll be contacting the story editor again and asking him to do an update, with my new information about this.In the end, I’m glad I made the move from PayPal merchant processing to Square last year. And very glad I’m not partnering with Loa nBuilder, and would absolutely not recommend Loan Builder for the PPP program.
I need to reset my password on loanbuilder. It gives me the option for New password, then confirm new password, then a box that say “ANSWER” What goes in that box?
Hi Ruth,
Unfortunately, we don’t have the answer either. You’ll probably want to reach out to LoanBuilder directly to get some assistance with your password reset. Sorry we can’t help!
Organization Name: City Buzz, inc
I began w a wonderful experience w my first loan. Very quick and efficient.The additional funds request is/was a complete nightmare It was like they never dealt w my business before. Asking for extreme amount of information- even w my perfect payment historyAfter 3 weeks I gave up and cancelled the application. I’ll never due this route again
Organization Name: Elixir Liquors
PayPal Loan Builder service is complete bullshit. They promise big loans and fast service and provide neither!I’ve run a successful small company for 17 years, with well over a million in sales annually for many years running ($1.4 million in 2019). Originally, PPLB said I qualified for up to $290,000 based on my sales (proven with bank statements). I applied for $50K, and was told I’d have an answer in just a couple days. I waited and waited and then, over a week later (allegedly waiting for underwriters!), they offered a loan of just $5K, less than 2% of the original $290,000!That’s not even worth the ding on my credit report. It’s nothing, peanuts! $5000 won’t cover even one week’s worth of expenses. What a waste of time! Half of America is shut down due to Covid19, and PayPal doesn’t give a shit.If you need a loan for your small business, look anywhere but there. PayPal Loan Builder is a bullshit service. They may be able to help you, but they won’t. Instead, they’ll just insult you after wasting your precious time!
Organization Name: JustJak’s
After speaking with the loan representative, providing the lengthy amount of requested documents, screenshots, and all information required for the loan, we were informed we were approved and the underwriting department would be completed at the end of the day (after the week long process). We received ok communication by the end of the day and made a follow up phone call to check with our representative about any other details for clarification. We did not receive a return call or email. We followed up with our representative via email on Monday and no return communication was made. We called and again no return communication occurred.Tuesday (today), we made a follow up call and spoke with our representative who subsequently informed us that the Loan Builder program decided to not move forward with the loan. This is contrary to our told we were approved days earlier. If the company is the inefficient and indecisive, I would be wary of their application process and validity of loans made to applicants. This is a process that was bait and switch. The reasons listed were never discussed as issues or potential preventative reasons during the application process.I would be wary and search for a much more reputable and stable lending organization. Do not just jump at any money offered—be thorough in your search. We are more than happy to not have a loan with such a devious and deceitful company. Our process was not thoroughly ethical and being lied to is not professional or respectful of us as the one looking for lending. We do not recommend this organization—loan seekers beware.
Organization Name: PACKMAN LLC
Its sad that these types of loan sharks are even legal. im definitely not dealing with them. i was kinda excited to try them out…well can anyone help me with a decent loan company for small business?
This comment refers to an earlier version of this review and may be outdated.
Hi T.J.!
I’m glad you reached out and asked this! We certainly do have many resources for you to find something you can feel more comfortable with in looking for a small business loan. Check out our post Best Low-Interest Loans For Businesses 2019. This resource will get you started, and will have plenty of other great resources within the post for further investigation. Thanks for reading, and best of luck on your search for an excellent loan company.
This comment refers to an earlier version of this review and may be outdated.
I would to like inform you guys that loan builder has zero customer service. This company really don’t care to help small business secure funding or make them feel special when inquiring about their product for funding. It’s really sad actually! There underwriting department is pretty bad, and will make up every reason to not approval you.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Totally Awesome Printing
Horrible experience with LoanBuilder, stay away from them. They lied to us at the beginning of the transaction and when we requested communication via email or written letter instead of the verbal phone conversations, they would tell us that they can’t utilize email, because they are only allowed to respond to customers with canned replies….This was a lie, because going through the application process, their sales people did everything via email.Nothing but lies, dishonest, and horrible customer service, they don’t follow through with what they say they are going to do.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: SWI, LLC
These guys absolutely SUCK! Horrible customer service, predatory lending at it’s worst.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Dalplex Direct Distributing, Inc
The LoanBuilder program offered by PayPal is fair when you objectively consider the cost of short-term capital. Secondly, you have to consider the cost-benefit as it relates to cost of loan to return on business activity. I took a loan for 26 weeks to buy some new vans for my ground logistics company and the increase business I was able to obtain immediately with having these extra vans on the road far excessed the cost of capital from PayPal. The loan process was not difficult and I was funded within three days.If I need another injection of working capital; I assure you PayPal LoanBuilder is the first place I will go. Thanks.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Forey Real Estate LLC
Agree! Quick, Easy! Professional direct service and communications!
After reading these testimonials, I will stay away. Tkx
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Gadget Galaxy
STAY AWAY FROM THE PAYPAL FIXED FEE LOAN BUILDER PROGRAM! THE REAL INTEREST RATE YOU PAY IS ABOUT 50%APR OR MORE!!! BUT THEY STRUCTURE IT SO IT LOOKS LIKE ABOUT 20%…WHAT THEY DO IS THIS…I WILL USE THE LOAN I GOT AS AN EXAMPLE.THEY LENT ME $18,000 AND HAVE A $3500 FEE. SO I PAY THEM BACK $21,500 DIVIDED BY 52 WEEKLY DRAWS FROM MY BANK ACCOUNT OF $413. DO YOU SEE THE PROBLEM?AFTER ONLY 4 WEEKS, THEY GOT $1600 OF MY $18000, AND AT A PRORATED COST OF 228%APR FOR THAT MONTH! THEN MONTH #2 ITS 114% AND IT GOES DOWN SLOWLY TO 18 PERCENT FOR THE LAST MONTH’S $1600 PORTION OF MY LOAN…. NOW YOU AVERAGE THOSE INTEREST RATES OUT, AND……UGGGHHHHHH SCARY!!!!! I AM STILL WORKING ON IT, BUT IT LOOKS LIKE 50% OR EVEN MORE!!! RUN FROM THIS!!!!!!!!!!!!!!
This comment refers to an earlier version of this review and may be outdated.
I don’t think you are calculating what you think you are calculating. APR is simply Annualized Percentage Rate. You are paying $413/week and after 52 weeks, you are paying back $21500. that is 19.44% APR. If you were paying 50% APR you would take your loan amount of $18,000 * .5=$9000 and that $9000 would be the “fee” you would be charged or the interest rate for that year.
Unless you are just a troll….and in that case, kudos on the distraction pattern.
This comment refers to an earlier version of this review and may be outdated.
I submitted a post that explained percentage vs APR but apparently the moderator deleted it. Maybe because I put a link to an external website that has an interest calculator.
Yes, $3500 is 19.44% of $18000. But percentage is not the same as APR since it does not take into account that the loan is being paid off over the course of the year.
For example, suppose you have a credit card with 19.44% interest rate and a balance of $18000. If you make equal payments (and don’t make any new purchases) such that it is paid off after one year you will find that the total amount of interest charged is a lot less than $3500. The reason is that as you pay it down the interest charged on each monthly statement will be less (i.e by the time you get to month 12 your balance will be about $1600 and interest will be about $26.
With the Loanbuilder loan you are paying $292 in interest EVERY month ($3500/12).
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Blackbird Mills INC
Very informative and I appreciate the review as I was leaning toward this for various reasons and your review brought to my attention an aspect I had overlooked! Thank You!
This comment refers to an earlier version of this review and may be outdated.
Awful Customer Service
Unprofesional
Stay Away!
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Finbro Construction, LLC
Very well-written helpful review.
This comment refers to an earlier version of this review and may be outdated.