PayPal Business Loan Review

What Is A PayPal Business Loan?

PayPal’s Working Capital business loans allow borrowers with established PayPal accounts to take out up to $97,000 with their first loan and use their daily sales to repay the amount. Because approval for these loans is based primarily on annual revenue, it’s much easier for borrowers with low credit scores or new businesses to qualify. Additionally, their loans fund within minutes, so if you’re looking for fast cash, it might be worth considering this lender.

How Does A PayPal Loan Work?

With a PayPal Working Capital business loan, you’ll select a percentage of your PayPal sales to be used to repay the borrowed amount, over the course of nine to 12 months.

PayPal Business Loan Rates & Terms

APR range: Annual percentage rates on PayPal business loans range between 15% and 30%.

Repayment Terms: PayPal will take out a portion of each sale until the amount is fully repaid. Upon establishing your loan agreement, you’ll choose whether you want the lender to take out 10%, 15%, 20%, 25% or 30% of each PayPal sale. Selecting a higher percentage, and thus a shorter time to repayment will ensure that the lender charges you a lower fee than with a lower percentage.

Loan amounts: If you’re approved for a PayPal business loan, the lender will allow you to borrow up to 25% of your yearly sales, with a maximum amount of $97,000 on your first loan and $125,000 for future loans.

Time to fund: PayPal’s business loans fund within just a few minutes.

Borrowing Costs: The repayment fees and annual percentage rate are dependent on the percentage of each sale that you choose to allow the lender to take out. Depending on the amount that you borrow, the fee can be as high as $15,000 if you choose the lowest percentage of repayment, at 10%.

Loan Example: If you have $200,000 in annual sales and want to take out a business loan of $25,000 with a repayment rate of $15% of each sale, your one-time fixed fee will be $3,079, making your total payment come out to $28,079.

Best for: PayPal’s business loans are best for companies whose owners may have low personal credit scores and are having trouble getting approved with traditional lenders with lower rates. Due to the low maximum amount, these loans are ideal for footing the costs of hiring new employees, purchasing new supplies, or funding urgent or unexpected expenses.

Co-Applicants Accepted? In order to apply for a PayPal business loan, you should have a PayPal Premier or business account that you use to apply for the loan through. Because you’re applying directly through your account and the biggest factor in your application is your annual income through the platform, you cannot use a co-applicant.

Direct Pay-Off to Your Creditors? Because a PayPal business loan goes directly to your account with the lender, there is no direct pay-off to your creditors.

PayPal Business Loans vs Traditional Bank Loans

Although PayPal’s business loans fund within just a few minutes — much less time than the weeks or months that a traditional bank loan can take to fund — their products also come with a significantly higher potential cost. While PayPal offers loans with APRs as low as 15%, a traditional bank loan can come with APR as low as 5%.

Traditional loans can be difficult to qualify for if you’re a business or borrower with a low annual income or credit score. Additionally, they can require much more paperwork and a lengthier application process than PayPal and other online lenders do.

Additionally, a loan with PayPal won’t help you build your credit score, while a traditional bank loan will report your loan directly to the main credit bureaus.

If your credit is above average, you’re operating an established business with a high annual revenue and your financial needs are not urgent, it might be worth taking the time to consider a traditional loan over a PayPal business loan.  

PayPal Business Loans vs Merchant Cash Advances

PayPal’s Working Capital business loans are very similar to merchant cash advances because the repayment of these products is made by taking a percentage of a business’ sales each day. However, a merchant cash advance can come with significantly higher annual percentage rates, with APRs often soaring into the triple digits.

PayPal Business Loans vs Online Small Business Loans

While PayPal’s maximum loan amount is just $97,000 for your first loan, you may be eligible for a much higher amount with an online business loan. Additionally, because there is such a wide variety of online small business loans, APRs can be as low as 6%, even for new businesses. Repayment terms can also be more flexible, with some online lenders offering terms of up to 10 years.

If you’re considering taking out a PayPal Working Capital loan, it may be worth submitting applications with a few other online lenders to see if you’re approved for a loan with a rate under 15%, more flexible repayment terms or a higher loan amount.

PayPal Loan Pros & Cons


  • Quick to fund, with access to cash within minutes
  • Easy, online application
  • Quick decision time
  • Easy for new businesses or borrowers with bad credit to qualify
  • Lower annual percentage rates than other online lenders
  • No collateral or personal guarantee required


  • Low maximum loan amounts
  • Higher fees than with traditional bank loans
  • Less flexible repayment terms than with many other lenders
  • No boost to credit score
  • PayPal membership required

Are PayPal Business Loans Safe?

PayPal is a reputable, worldwide, online payments system and has been accredited with the Better Business Bureau since 2001.

PayPal Business Loan Alternatives – PayPal vs LendingTree, FundBox, & OnDeck

vs LendingTree

LendingTree is an online loan-matching service that connects borrowers to investors who are interested in acting as lenders. LendingTree’s loans can be as high as $1 million and come with repayment terms as long as 15 years.

vs FundBox

FundBox’s business offers loans with a similar maximum amount of $100,000. However, their loans can also come with a fairly steep annual percentage rate, with APRs as high as 78.6%. Additionally, this lender’s repayment terms are less flexible than PayPal’s, with a maximum repayment term of just 24 weeks.

Learn More About FundBox

vs OnDeck

OnDeck offers significantly higher loan amounts, with a maximum amount of $500,000 for term loans. They also offer lines of credit up to $100,000. However, OnDeck business loans can come with much higher annual percentage rates, with a maximum APR of 99%. Their loans can also take a few days to fund, so if you need cash within the same day, this may not be the lender for you.

Learn More About OnDeck


Although PayPal’s business loans are very quick to fund and come with lower APRs than many of its competitors, it may be worth applying with some other online lenders to see if you qualify for a lower rate, if you don’t need immediate cash. Even if you have a bad credit score or low annual income, make sure to fully evaluate all of your borrowing options to ensure that you find the loan with the best rate and repayment terms that are right for you.

Compare Business Loans

See the online credit card applications for details about the terms and conditions of an offer. Reasonable efforts are made to maintain accurate information. However, all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the issuer’s web site.

The offers that appear on this site are from third party advertisers from which PrimeRates receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). PrimeRates strives to provide a wide array of offers, but our offers do not represent all financial services companies or products.

Scroll to Top