PayPal Working Capital Review
PayPal Working Capital is a fantastic resource for merchants who use PayPal. The application is fast, the fee structure is flexible, and repayment is easy.
PayPal Working Capital

Total Rating | 4.5 |
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Interest Rates & Fees | Good |
Application Process | Excellent |
Sales & Advertising Transparency | Good |
Customer Service | Good |
Reviews, Complaints, & Testimonials | Good |
Pros
- Borrower qualifications are lower than what banks require
- No credit score requirements
- No extra fees
- No prepayment penalties
- The application process is fast and easy
Cons
- Only available to PayPal sellers
- PayPal loan rates can be expensive
- Poor customer service
PayPal Working Capital Overview
PayPal Working Capital is a business loan service offered by PayPal. PayPal Working Capital is intended to help merchants get 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 fixed fee. Repayments of the loan and fee are made through a daily deduction of a percentage of your PayPal sales.
Is PayPal Working Capital right for your business? Keep reading to find out!
Table of Contents
- Services Offered By PayPal Working Capital
- PayPal Working Capital Borrower Qualifications
- PayPal Working Capital Interest Rates & Fees
- Application Process
- What If Your PayPal Working Capital Loan Application Is Declined?
- Sales & Advertising Transparency
- Customer Service & Technical Support
- PayPal Working Capital Reviews, Complaints, & Testimonials
- Final Verdict
Services Offered By PayPal Working Capital
PayPal offers short-term business loans. However, PayPal’s business loans differ slightly from the standard short-term loan. PayPal will loan qualifying business customers an amount of money for a flat fee. It will then collect a percentage of your daily PayPal transactions until the loan is paid back.
PayPal Working Capital Borrower Qualifications
Time In Business | 90 days |
Credit Score | N/A |
PayPal Revenue | $20,000 annually for Premier accounts; $15,000 annually for Business accounts |
PayPal does not require a minimum credit score as part of its PayPal Working Capital requirements, nor does it check your credit history. However, you need to have a PayPal Premier or Business account that’s at least 90 days 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. Additionally, you must pay off any existing PayPal Working Capital loans to apply for a new one.
PayPal Working Capital Interest Rates & Fees
Borrowing Amount | No longer disclosed |
Term Length | Max. 18 months |
Factor Rate | Approx. x1.01-x1.58 |
Origination Fee | None |
Effective APR | Learn more |
Collateral | None |
Unfortunately, PayPal Working Capital no longer discloses maximum loan amounts. PWC previously stated that it will loan you a maximum of 35% of your annual PayPal sales, capped at $125K for your first two loans and $200K for loans after that, which would mean that if you make $100K annually, PayPal will loan you a maximum of $35K.
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 5% or 10% of your loan every 90 days. The 5% minimum is required for loans that will take 12 months or longer to pay off, while the 10% minimum applies to loans that will be repaid within 12 months. If you are falling behind, you may need to make catch-up payments.
The only fee PayPal charges is a one-time fixed fee, calculated once by multiplying a factor rate (sometimes called a “buy rate”) by the principal. This fee must be repaid along with the principal. Because PayPal does not charge interest (which compounds), your fee will not change regardless of how long you take to repay the loan.
Sadly, Paypal removed the loan calculator it once included on its Working Capital page. Based on calculations from that tool, PayPal will offer you somewhere between 1.01-1.58 times the amount of capital you’re borrowing. In other words, you could pay anywhere between $0.01 and $0.58 in fees for every $1 you borrow. That’s a big spread — excellent at the low end and painful at the high, so make sure you’re picking a repayment plan that won’t cost you a ridiculous sum of money.
Higher fees are directly inverse to the withholding percentage. The less PayPal can deduct from your account each day, the higher your fee. By contrast, the more PayPal is allowed to deduct, the lower your fee.
Application Process
All you have to do to apply for a PayPal Working Capital loan is fill out an application, which you can access via your PayPal account. The application involves verifying your identity, place of business, and some financial information. Typically, PayPal auto-fills this information, and all you have to do is make sure that it’s correct.
You’ll know if you’ve been approved or denied when you’ve completed the application.
If you’re approved, you’ll have the opportunity to choose a fee and withholding rate. After agreeing to the terms, the working capital will be deposited into your account instantly.
If you’ve been denied, it may be due to problems with your business or because of PayPal’s sometimes finicky application and verification system. Unfortunately, the cause can be difficult to figure out. However, here are common reasons loan why requests get denied and what you might be able to do to get approved:
Loan Denial Troubleshooting
The reason for a denial isn’t always easy to determine. Merchants report on the community forum that the application simply turns up an error code with no further explanation. The most common problems appear to be an identification error (the system could not verify your information), error code 646 (you have abnormal sales), error code 641 (sales holds or a pending balance on your account), or you’re applying too soon after paying off another loan.
Based on reports from other merchants, here is what you can do to get your application accepted:
- Wait Three Days: If you have just paid off a loan, PayPal advises merchants to wait at least three days before applying for another so that the system has time to process the status of your old loan.
- Check Your Business Information & Address: If you’re getting an identification error, it may be because your information was entered incorrectly (or in a way the system doesn’t like). Make sure your information is accurate. If that doesn’t work, try changing the abbreviations or formatting choices, such as changing “Boulevard” to “Blvd.”
- Clear Your PayPal Credit Balance: One merchant reported that they had success getting a loan after clearing their PayPal Credit balance.
- Keep Applying: If it’s been at least three days since you paid off the balance, your account is in good standing, and you aren’t getting an identification error, your best bet may be to keep applying every day. PayPal does not penalize you for doing so, and many merchants have reported that they were suddenly eligible one day for no apparent reason, even after being denied the day before.
Although PayPal often doesn’t provide a reason for denial upfront, it does send out a more thorough reason for denial via snail mail. As such, you may be able to get a more clear explanation for the rejection within a couple of weeks.
If you keep getting denied and don’t have time to keep applying, you might want to seek out an alternative lender. Fortunately, most lenders will be able to give you an initial approval or denial in a few minutes. LoanBuilder, a PayPal service, offers decent rates and quick funding, so it’s a good place to start.
What If Your PayPal Working Capital Loan Application Is Declined?
If PayPal keeps denying your Working Capital loan application, you may want to reassess your business needs and the amount and type of funding you’ll need to meet those needs before seeking another lender.
When it comes time to find an alternative lender, LoanBuilder isn’t your only option — our guide to the best PayPal Working Capital alternatives is a great resource for exploring your other options.
Sales & Advertising Transparency
PayPal offers a fairly extensive FAQ about its working capital loans. You should have a very clear idea of how the loan works before applying. That said, the latest version frustratingly dances around providing concise numbers. The loan calculator has also been removed.
The other thing I wish PayPal did provide more information about is its rejection criteria. Merchants who have been denied often have no idea why. PayPal usually does give an explanation, but oftentimes it’s too vague to be of any real use.
Customer Service & Technical Support
PayPal Working Capital Support | Availability |
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Phone Support | |
Email Support | |
Support Tickets | |
Live Chat | |
Dedicated Support Representative | |
Knowledge Base or Help Center | |
Videos & Tutorials | |
Company Blog | |
Social Media |
You can reach PayPal via phone (8 AM-8 PM Monday-Friday) 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 if you’re having problems getting approved, it’s still worth it to call customer service; they might have more insight regarding what you’re doing wrong than you do.
Additionally, PayPal has a 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.
PayPal Working Capital Reviews, Complaints, & Testimonials
Negative Reviews & Complaints
PayPal has a page on the Better Business Bureau, though it’s nigh impossible to find any complaints specifically regarding the Working Capital service. That said, as we’ve talked about in our review of PayPal Zettle, PayPal is extremely professional and courteous when responding to and resolving complaints.
Here are the most common complaints I gleaned from PayPal’s community forum, PayPal Working Capital reviews, and a few other places on the internet:
- Small Borrowing Maximum: PayPal’s previous policy had been to offer 35% of your annual PayPal sales, with a cap of $125K for your first loan and $200K for subsequent loans. Because many businesses only use PayPal as a secondary source of payments, that number might be a very small amount of their total income.
- Denials: Merchants have reported technical errors or denials, even if PayPal has previously loaned money to their business. If you’re having trouble, check out the Loan Denial Troubleshooting section above to understand the reasons you might be getting denied and what you can do about it.
- 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.
- Huge Difference Between High & Low Fees: The spread between PayPal Working Capital’s low and high fees is enormous, making them excellent at the low end and red-flag-worthy at the high. Make sure you’re on the lower end before you accept.
Positive Reviews & Testimonials
PayPal gives you a lot of reasons to like the service it provides.
The company has a few testimonials on its website, and you can find people saying a lot of nice things on PayPal’s community forum, among other places. The consensus is that customers like this service because of the following:
- Fast Application Process: The application process only takes a few minutes.
- Easy Access To Cash: PayPal is a master at fast cash transfers. The money can be in your account within minutes of accepting a loan offer.
- One-Time Fee: No accruing interest? Sounds like a good deal.
- Inexpensive Fee/Low Effective APRs: PayPal’s fees are often lower than those of its competitors.
- 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.
We’d love to have you contribute to the conversation, though. Have you applied for a PayPal Working Capital loan? What was your experience like? Drop us a comment and let us know all about it!
Final Verdict
PayPal Working Capital is a fantastic resource for merchants who use PayPal. The application is fast, the fee structure is flexible and customizable, and repayment is easy. PayPal generally has very reasonable fees, but they have the potential to run high. As such, you should learn what to look for to make an informed borrowing decision.
Fortunately, although PayPal Working Capital loans are a bit unusual, they are relatively straightforward, and the website provides enough information about them that you shouldn’t run into any surprises (though we don’t like the fact that PayPal has gotten cagier about maximum borrowing amounts). But if you think another funding solution would better fit your business due to poor credit (or no credit), check out some of our favorite loans for startups with bad credit.
Once again, merchants who are getting denials might want to investigate their other options. However, if you are eligible, PayPal Working Capital is certainly worth including in your comparisons.
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Organization Name: Marble masters
They only have your back for a loan when your company is doing good , the minute your having a bad month, or slow don’t bother trying to get them to help, because they won’t ! They say there computers tell them if they can help you or not , even if your approved don’t bother trying to jump through the hoops they ask you to do ! They won’t approve you it’s a waste of time unless your doing great, even after years of working together in the long run they don’t have your back ! Trust me , they’ll just run and hurt your credit ! Then say underwriters said no sorry !
This comment refers to an earlier version of this review and may be outdated.
Organization Name: vintage audio
I am suprised to see the positive reviews for paypal working capitol because just a simple search online will reveal how upset and annoyed a lot of paypal customers are. The service is very unreliable and does not give a clear indication as to why the application is denied. I had ONE paypal WC loan that went through over a year ago, i paid it off in a 3rd of the predicted time as i have great sales yet i have been declined for another ever since with no indication why. So each day i think today may be different and i go through the process of filling in the form, hit submit and its the same response everytime that i am not eligible.The whole application process should only be available to those who paypal decides DO qualify , its a complete waste of time otherwise and gives false hope to those who need it or at least give a reason for the decline so we dont keep wasting our time applying and can aim to fix the reason it was declined in the first place. My small business would thrive if i had access to funding and so paypal would generate even more interest from me and this would apply to thousands of other customers yet we are all being discriminated by paypal without a provided reason.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: skylineresale
Im a power seller on e-bay pay pal working capital has no customer service over the weekend and when you deal with their customer service they are like vipers that will vindictively cause damage to your credit score and the loan this is a predatory loan with very hi interest and will hurt your ebay store as they want 30 percent of all your sales when you go to pay your bill to pay pal capital they take days to take the payment and will cause tremendous confusion in your bookkeeping meaning if you want to be a great seller on ebay stay away from PayPal working capital
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Just Copyeditors
I am surprised to see all the negative reviews below, especially those talking about high fees and APR. Has this Working Capital system changed in 2019, maybe? I say this as I just took working capital of £3,000 and paid £180 in fees. I think that is extremely good.What I like about the PPWC system is that it took about five clicks to receive the funds in the account within…ooh, thirty seconds?! That is insanely fast approval and transfer of funds, giving me the freedom to continue working and earning instead of worrying about funding the expansion I have planned. My Paypal-processed income through the business is consistently rising, so perhaps higher fees come in only if your business seems to be on the slide… the trend must have something to do with it.Any loan is based on the risk the lender is taking, so they will be taking into account business type/sector, sales, and trends so if my business dips (as seen solely on Paypal–which is great as this does not affect my credit score) then, of course, fees will increase. They have to buy added risk insurance to cover added risk posed by a change in the performance of a business.I was absolutely staggered–in a good way–to have this approval so fast and so easily. I also love the fact I can pay back easily and pay back using extra payments. No complaints from me; best, most efficient merchant lending I have ever seen.
This comment refers to an earlier version of this review and may be outdated.