PayPal Working Capital Review

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San Jose, CA


  • Short-term loans
  • Working capital loans
  • Fast application process
  • Low fees
  • Flexible fee structure
  • Easy repayments


The PayPal conglomerate of services is huge. If you sell online, chances are you use PayPal, at least as a backup payment method. If you are a brick-and-mortar store, you might use their mobile processing service, PayPal Here. Here’s another service to add to their already ridiculously large amount of options: PayPal Working Capital.

PayPal launched a Working Capital pilot program in 2013 before opening up to all PayPal users in 2014. The lending service is intended to make it easier for small business owners to get hold of capital to grow their businesses.

In practice, PayPal’s financing product resembles a merchant cash advance, though technically it’s a loan (not a sale of future receivables). When you get a loan from PayPal, you are charged a one-time flat fee; to pay off the loan and the fee, repayments are made through a daily deduction of a percentage of your PayPal sales.

There is a lot to like about PayPal Working Capital: the application process is generally fast and easy, the loans offer a lot of flexibility. In terms of borrowing fees, you can expect to repay somewhere between $1.005 and $1.35 for every dollar borrowed.

Unfortunately, PayPal services suffer from a few flaws, and Working Capital is no different. Like PayPal at large, the customer service is inconsistent. Furthermore, the Working Capital system tends to be inconsistent about approvals and occasionally runs into technical errors.

That said, even though PayPal Working Capital has a few problems, the convenience of applying and repayment, along with the low cost of borrowing make PayPal Working Capital a service worth including in your comparisons (if you’re eligible for the service).

Still interested? Read on for the details!

Services Offered

PayPal offers short-term business loans.

Borrower Qualifications

Time in business:3 months
Credit score:N/A
PayPal revenue:$20K annually for Premier accounts, $15K annually for Business accounts

PayPal does not require a minimum credit score. However, you do need to have a PayPal Premier or Business account that’s at least three months old, and be processing at least $15K/year if you have a Business PayPal account or $20K/year if you have a Premier PayPal account.

Terms and Fees

Borrowing amount:$1K – $97K
Term length: Max. 18 months
Factor rate:x1.005 – x1.35
Origination fee:None
Effective APR:Learn more

PayPal will loan you a maximum of 18% of your annual PayPal sales, with a cap at $97K. For example, if you make $100K annually, PayPal will loan you a maximum of $9K.

PayPal Working Capital loans are repaid through a daily deduction of a percentage of your PayPal sales, so they don’t have a specific maturity date. However, to keep you on track, PayPal requires that you pay at least 10% of your loan every 90 days. So, if you are falling behind, you may need to make catch-up payments.

The only fee PayPal charges is a one-time fee, calculated once by multiplying a factor rate (sometimes called a “buy rate”) by the principal. Because PayPal does not charge interest, your fee will not change regardless of how long you take to repay the loan.

Based on the calculator on the website, PayPal will offer you somewhere between 1.005 – 1.35 times the amount of capital you’re borrowing. In other words, you’ll pay somewhere between $1.01 and $1.35 for every $1.00 you borrow.

Higher fees are directly inverse to the withholding percentage. The less PayPal is allowed to deduct from your account each day, the higher your fee is going to be. By contrast, the more PayPal is allowed to deduct, the lower your fee.

Here’s an example from the payments calculator on the website, so you can see how the withholding rate corresponds to the fee. Obviously, you should try it out yourself using numbers more pertinent to your business.

paypal working capital fee calculator

In my calculations, the effective APR was 25% or lower. To understand how to use an estimated APR to understand loan costs and make comparisons, check out our article about APRs and short-term financing.

Application Process

All you have to do to apply for a PayPal Working Capital loan is to fill out an application accessed via your PayPal account. The application involves verifying your identity, place of business, and some financial information. PayPal doesn’t need a whole lot of information, given that they’re your credit card processor and may, in fact, know more about your financial situation than you do.

When you’ve completed the application, you’ll know if you’ve been approved or denied.

If you’re approved, you’ll have the opportunity to choose a fee and withholding rate. The working capital will be deposited into your account instantly.

Denials are caused by a number of reasons, some due to problems with your business, and some due to problems with PayPal’s algorithms. Merchants report that the system is often unclear about why a certain business was denied, but here are some common reasons:

  • Seasonal sales fluctuation
  • Too many chargebacks
  • Holds on your account
  • Poor eBay seller rating

On PayPal’s end, you might be denied because it was unable to verify some of your information or some other technical error. If you can see no reason for denial, your best course of action is to wait until the next day and try again. If you’re re-applying for an additional loan, wait at least three days for PayPal to process that your previous loan has been paid off.

Sales and Advertising Transparency

PayPal has a remarkably detailed section of their website dedicated to this service. You should have a very clear idea of how the loan works before applying.

The only thing I wish they’d provide more information about is rejection criteria. Merchants who have been denied often have no idea why. PayPal does provide an explanation, but oftentimes it’s too vague to be of any real use.

Customer Service and Technical Support

You can reach PayPal via phone (4am – 10pm Monday – Friday; 6am – 8pm Saturday – Sunday PST) or email. The company also has an active presence on social media sites, including a Twitter account dedicated to customer assistance.

Unfortunately, as many large companies do, PayPal suffers from inconsistent customer service. Working Capital customers are especially susceptible to unhelpful customer service because the loan approval process is completely automated. If you run into problems, customer service may not have a whole lot of helping power. Even so, if you’re having problems getting approved, it’s still worth it to call up customer service; they might have more insight regarding what you’re doing wrong than you do.

Additionally, PayPal has a very large and very helpful community forum. Any problems you run into have likely been encountered by somebody else, so it’s worth checking out if you’re experiencing difficulties.

Negative Reviews and Complaints

PayPal has a page on the Better Business Bureau, though it’s nigh-impossible to find any complaints regarding the Working Capital service. That said, as we’ve talked about on our review of PayPal Here, PayPal is extremely professional and courteous when responding to and resolving complaints.

Here are the most prevalent complaints I gleaned from PayPal’s community forum and a few other places on the internet.

  • Small borrowing maximum: The maximum PayPal will offer is 18% of your annual PayPal sales, up to $97K. Since many businesses only use PayPal as a secondary source of payments, that number might be a very small amount of their total income.
  • Technical errors: Merchants have reported technical errors or denials for no reason, even if PayPal has previously loaned money to their business. While still a minor problem, these complaints have slowed down since I last checked in on this service.
  • No early repayment incentive: Because PayPal charges a one-time fixed fee, you cannot save money by repaying early. The only reason to repay early is to get another loan.

Positive Reviews and Testimonials

PayPal gives you a lot of reasons to like their service.

The company has a few testimonials on their website, and you can find people saying a lot of nice things on PayPal’s community forum, among other places. The general consensus is that customers like this service because of the:

  • Fast application process: The application process only takes minutes.
  • Easy access to cash: PayPal is the master at fast cash transfers. ACH takes a few days, but Paypal is almost instantaneous.
  • One-time fee: No accruing interest? Sounds like a good deal.
  • Inexpensive fee/low effective APRs: For a short-term loan, PayPal has some good fees.
  • Flexible fee structure: The fee structure gives the borrower some control over the deal.
  • Hands-off repayment method: Just make sure the money’s in the account. PayPal does the rest.

Final Verdict

When PayPal Working Capital works, it works really well. The application is fast, the flexible fee structure is great, and repayment is easy. The fees, while potentially not the greatest your business could access, are significantly better than most other short-term loans. This service is good for any business that would benefit from a small infusion of capital.

Merchants that like the looks of PayPal Working Capital might also want to investigate the possibility of obtaining a line of credit. Like this service, lines of credit are intended for a small infusion of cash. Unlike this service, you don’t have to pay off your previous loan and reapply every time you want more money.

Bianca Crouse

Bianca Crouse

Bianca is a writer from the Pacific Northwest. As a product of the digital age, she likes absorbing large amounts of information and figures she might as well pass it on. When not staring at a screen, she is probably foraging for food outside, playing board games, or harassing somebody with theories about that movie she just watched.
Bianca Crouse
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    Great at first.At first the loan was great. We were able to repay it quickly because they took out their % quickly. The second go around PayPal literally leaves the money in there and doesn't deduct for days or even over a week. We are then stuck waiting to withdraw our portion to pay bills. Each time they wait longer and longer. I've just started leaving them hanging and plan to just pay it off in full next month. I won't be getting another. It's hard to repay them if they don't take their cut and I cannot leave my bills unpaid waiting on them to take their portion!

    Dana Mezzatesta

    I HAD 2 PayPal loans both paid on time and paid off. 3 rd Loan denied! Nothing wrong with my account. Awful!!!!!


    My 1st loan was $27,000. I had my money in 24 hours.Bought new equipment. Have paid back about 1/2 and as soon as it is paid in full, I will hopefully do the same.Great easy way to fund a small business.


    I was one of the first clients to be offered this working capital program, have paid back 9 loans ranging from $20,000-$30,000, always take 30% payback and have made it happen without any issues, well today at 9:45am on a Monday I get a collection call from paypal, I explained that the 30% over the weekend was transferred to our account and that being involved in weekend work ( a limo service most busiest time)we would take care of it this week, my issue is this happened on a saturday and very rarely happens and is taken care of within 24 hours when we do not have enough for working capital to take their cut, we get an email ,we are aware of this and know we need to make those funds available ,the phone call was NOT necessary and has made me realize that times are changing and this is going to become an added Harrassment I don't need so having less than 5% owed back on a 30,000 loan I will NOT be doing this again, we have proven ourselves as a company and have always paid back "catch up" payments within 24 hours if they occur and that phone call just ruined this relationship

    Susan M Lawrence

    I used PPWC once and paid back quickly in less than 3 months.. I reapplied and was denied, I called customer support and apparently it was due to having a rolling reserve my account, I was told to reapply the following day I did and was again declined this time was told it was due to seasonal sales= what gives PayPal?? Is this how you treat your best customers?


    PayPal Working Capital is a wonderful way to expand your business. I'm on my second loan, which was increased by $1500 because the first loan enabled me to improve my sales. Paying off my first loan was absolutely painless. I hardly noticed it. I was amazed at how quick and easy the whole process is. From initial application to having the money in your account takes less than 5 minutes. Pick your pay-off percentage carefully. The lower the percentage, the higher the fee. But, you might not mind the higher fee if you'd rather keep more of your sales revenue. You need to weigh your immediate financial needs against your longer term needs.


    The PayPal working capital was waste of time and resources for me. My sales were going high each day/month before I borrowed PWC. Since I borrowed, sales went drastically down. I assume it is because, I chose to repay in 18 months with 10% daily deduction from my sales. This is why, probably, my sales went so drastically down. I don't know who, PayPal or eBay as they are connected together, hold my sales in the slow rhyme. The reason I assume is, say, if my sales would be much higher then I would repay he loan in 6 months or 12 months but I signed up for 18 months. So, they carefully monitor my sales, in order to the total daily deduction would not exceed 10%!!! I figured it out after while as before I never used PWC. Despite PWC I have a bank loan, 2 other small loans and I have to repay them as well! How on heaven, before when I didn't have any loans I increased my sales 6 times for only 6 months. But now with 4 types of loans sales are lower then last years! It is better not to mix up PWC loan with other ones, keep PW separately, otherwise it destroys all business. Now, when I check the repayment history, it shows, for 1 year I repaid 2/3 of the loan and so 1/3 is left until the end of the terms which is last 6 months! Even, other credit organisations noticed it, before they issued me loan my sales were high than now. I don't want anymore this PWC once I repay it. They must not hold sales because of chosen %%%%%%%. I didn't give my permission for monitoring my sales in favour of them. I was worried what happens if I repay my loan for 6 months or earlier, now I know, PayPal doesn't let you sale more than 10% of the repayment, what is such shame!!!!!!


    This comment refers to an earlier version of this review and may be outdated.


    This is the most transparent loan you will ever get. I started using PayPal to process my business credit transactions in July of 2015. I applied for a loan in April of this year and was loaned $20,000. It will be paid off next month and it has really helped me purchase inventory and pay back 10% of my daily sales. I don't even miss it now and will apply for a second loan once this one is paid off. This helps a small business in so many ways and if you have a slow month, you just pay the a little less each day. 5 stars for sure. P.S., Vend point of sale integrates with PayPal and they are an awesome combination with outstanding support.


    This comment refers to an earlier version of this review and may be outdated.


    Were you able to take out another loan.? If so for how much? Did it go up?


    this concept is order to "borrow" 10k, i need to keep a MINIMUM of 10k in my paypal account.So basically, i have to let them hold my money in order for them to let me borrow up to the max of my money that they have? WTF?there is ZERO logic behind using this "service"


    This comment refers to an earlier version of this review and may be outdated.


    Hello Tara,

    I have used PayPal working capital twice now. They do not factor in dollar amount in your account. They go by your sales volume and there is no credit check. I think that’s pretty good.

    This comment refers to an earlier version of this review and may be outdated.


    Working Capital is great for small businesses that can not get conventional bank loans. The process is quick and the money is available within minutes.We are now on our 4th loan and have never had an issue. I would like to correct some of the info on the article though- Paypal will loan up to 15% of your sales in the past 12 months- Maximum loan amount is $85,000 (not $97,000)- Interested is nowhere near 25% APR even when amortized. We have had loans of $4,500, $6,500, $14,000 and $16,000 and the interest has been $230, $295, $1,016 and $1,200 respectively with a 20% repayment rate. Keep in mind that each loan can last up to 18 months so even amortized, it's nowhere near 25%. Finally a note for cases like Tara's - although the money is available immediately in your Paypal account, they can't be transferred to a bank for 5 days! You can withdraw with your Paypal card and you can use the money to pay other Paypal people but it is not available to send to a bank for 5 days. That is why her transfer failed. Finally, even when a bank transfer fails, the money doesn't just get 'lost'; the transaction reverses back to the Paypal account but it can take up to 2 weeks.


    This comment refers to an earlier version of this review and may be outdated.

    Bianca Crouse

    Hi Andrew,

    As of my last update, PPWC had upped the amount they’d loan to a maximum of 18% of the merchant’s annual sale, with a cap of $97K. See PayPal’s FAQ for more details, particularly the question “How is my maximum loan amount determined?”

    As for APR, you are correct that they can be lower than 25%. I have updated the article to more accurately reflect this.

    Thank you for your input, and I’m happy that PPWC is working out for you!

    This comment refers to an earlier version of this review and may be outdated.

    Homer Munoz

    Paypal Working Capital has been great for my business.
    I give it a strong A+

    This comment refers to an earlier version of this review and may be outdated.


    All I'm going to say is this loan is GREAT. You pick how you would like to pay back as far as the percentage goes. If your business keeps making money Paypal will keep loaning you money. It's really great for a business that's looking to grow.


    This comment refers to an earlier version of this review and may be outdated.


    I have used this service twice and love it. It helped me with a sudden techno-crash and this time it has helped with a massive ad campaign. Thank you!


    This comment refers to an earlier version of this review and may be outdated.


    I got my 1st loan for $9500.00 and it is only taking me about 2 months to pay off. I am planning to get another loan for around $20,000. I take these loans only to purchase inventory. My 1st loan I chose to pay back at 25% of my sales. The rate was great. Better then any small business loan but sometimes the 25% was a bit high so my second loan I think I am going to pay back slower and only have them take 10% out of my sales. For me, the application took about 2 minutes and I literally had the money 1 minute later. Awesome!!!! and I have always been a PayPal Hater....Even though it is really Web Bank providing the funding I still give PayPal the credit for this


    This comment refers to an earlier version of this review and may be outdated.


    I have used this service twice now. Initial time was for $2000. That loan was for purchasing a bulk lot of goods to resell. It took me just over a year to pay back. 2 months ago I took out one for $4,500. The purpose of this loan has been to help me grow my business. I had hired employees and wanted to be able to increase their hours worked per week. But the first 6 weeks of a new hire or increased hourly employee is often the hardest for making payroll. This has allowed 2 of my part timers to double their work done. And I am already starting to see my sales increase by over 300% in that short period of time! I'll have the loan repaid MUCH sooner than the 9 months I signed on for (20%) - and I'm growing right in time for 4th quarter sales! Kudos to Working Capital!


    This comment refers to an earlier version of this review and may be outdated.


    I've got to say I think this working capital loan is awesome! I'm on what I believe is my 6th loan and I've gone from a $2000 loan in early 2014 when it started to my $20000 loan that I'm finishing up in the next week. I will have paid it back within 120 days and that money used from the loan has increased my sales percentage by double digits. Because of the capital loan, I've been able to buy larger lots of merchandise which has stabilized my business. Without the loan, yes I would have eventually gotten to where I am today but with this loan, it made it happen much faster and allows me to continue to grow this business. Thank you Paypal Working Capital!


    This comment refers to an earlier version of this review and may be outdated.


    Were you able to take out another loan? I am going to take out my second loan soon a small was just wondering if they will increase the amount. My first loan was 17500. I am hoping for 25,000 this time around.

    Kun Kim

    paypal repayment process is ripoff sucking


    This comment refers to an earlier version of this review and may be outdated.


    In April, 2015, they loaned me $4k. In January, 2016, they loaned me $7k. In August, 2016, they loaned me $7.5k. The entire process is completely flawless. With each loan, the funds were in my PayPal Account within a matter of a few seconds. Needless to say, I am extremely satisfied with their process. After I paid off the first loan, they offered me the second loan the next day. After I paid off the second loan, they offered me the third loan, the same night. Great company to do business with.


    This comment refers to an earlier version of this review and may be outdated.


    I applied and had money in my account within 10 mins, start to finish. I am 15 days into a loan and I am beyond pleased. With past credit issues, there is no way I can get a loan at such a low cost (though it’s a fixed rate, it turns out to be 5.6% interest on the loan. Certainly much lower than I can get on my own). Paypal knows my history and knows I can pay it back in a timely manner (especially with it being automatically drafted from my Paypal account at a set percentage on a daily basis). They don’t take money I don’t have. They are taking a percentage of the money I make, as the clients come in. Here, at day 15, I have painlessly paid off 14.8% of the total loan. The money helped me to do some much needed marketing….thus increasing sales….thus speeding up the payback process….and increasing my income. Great work, Paypal!


    This comment refers to an earlier version of this review and may be outdated.

    Fred Takla

    great and easy process


    This comment refers to an earlier version of this review and may be outdated.


    PayPal Working Capital worked very well for me. The application and transfer of funds was easy. It was nice to be able to choose how much I wanted to pay back each day out of my revenue. PayPal is my primary for credit card payments, online and in-store, so has been seamless from start to finish. While I have not had to use customer service for this particular PayPal service, I have always received excellent, and easy to understand service whenever I have called for other reasons. I would not hesitate to use PayPal Working Capital again.


    This comment refers to an earlier version of this review and may be outdated.


    Right now this service is a one star. I received working capital and transferred it to my bank account.The transfer says 'pending' after two days. Paypal says it's a bank error. My bank says it has not received the money from Paypal. Problem is on day 3 I have to start paying back the loan. No one at Paypal can give me a reasonable explanation as to where the money went, even though I made another transfer on the SAME day to my bank that arrived within 24 hours. I have been with Paypal for 5 years. It has never taken this long for funds to arrive. You would think that after 5 years they would consider me a valued customer. Unfortunately this is not the case.. SO tomorrow I have to start making payments on money that for all intent and purposes is LOST. Way to go Paypal. Instead of helping my small business you just screwed it!


    This comment refers to an earlier version of this review and may be outdated.

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