Many companies offer a variety of financial services ranging from loans to investments. PayPal, one of the largest financial technology companies, also provides financial services.
One of the financial services is Paypal Loanbuilder, which is more focused on business loans. On the other hand, Working Capital works as a merchant cash advance. They do seem similar but are very different based on features and functionality.
Key Takeaways
- PayPal LoanBuilder provides traditional term loans, while PayPal Working Capital offers short-term cash advances.
- LoanBuilder offers higher loan amounts than Working Capital, with a maximum of $500,000 versus $125,000.
- Working Capital requires repayment through a percentage of daily PayPal sales, whereas LoanBuilder has fixed weekly repayments.
Paypal Loanbuilder vs Working Capital
Paypal Loan Builder is a service by Paypal that offers users a traditional business term loan. Users repay the loan on an automatic weekly payment. Paypal’s working capital is a financial service by Paypal that offers additional capital or funding for businesses. The debt is paid by deducting a percentage of each sale.
Paypal Loanbuilder is a financial service offered by Paypal that resembles traditional business loans. Although, an automatic weekly payment is paid by the borrower rather than a monthly payment.
However, there’s no requirement to use PayPal for processing payments, Unlike Paypal Working Capital. Also, there’s a single fixed with no origination fee and no early repayment fees.
PayPal Working Capital is also a financial service provided by PayPal that is similar to the merchant cash advance program. It offers additional working capital to the business.
Although, the payment should be made with the use of PayPal only. However, the debt is paid off by a percentage of sales through PayPal’s account.
Comparison Table
| Parameters of Comparison | PayPal Loanbuilder | Working Capital |
|---|---|---|
| Similarity | PayPal Loanbuilder is similar to a traditional business-term loan. | PayPal’s Working capital is similar to Merchant Cash advance. |
| Provides | It provides a business-term loan. | So it provides additional capital for the business. |
| Amount | An amount of 500,000USD in terms of up to 52 weeks can be borrowed through PayPal Loanbuilder. | An amount of 125,000USD in terms of up to 52 weeks can be borrowed through PayPal Working Capital |
| Repayment | Payment is made by automatic weekly payment. | A percentage of the amount is deducted from each sale. |
| Funding | Funding is done is takes time. | Funding is done in few minutes. |
| Requirement of Paypal for processing payments | There’s no necessity of using PayPal for processing payments in PayPal Loanbuilder. | There’s a necessity of using PayPal for processing payments in PayPal Working Capital. |
| Flexible Payment | There’s no option of flexible payment. | In contrast, there’s an option of flexible payment. |
| Credit Score | The credit score determines the amount that can be borrowed in PayPal Loanbuilder. | There’s no need for a credit check. |
What is PayPal Loanbuilder?
PayPal’s one of the financial services, PayPal Loanbuilder, is a traditional type of business term loan. It was earlier known as PayPal Business Loans. But today, they call it PayPal Loanbuilder.
The similarity of the service is with Business term loans. Although, the debtor can make automatic weekly payments instead of monthly payments. The maximum amount that can be borrowed is 500,000 USD in terms of up to 52 weeks.
The service creates a perfect loan for your business according to your preference, tailor terms, clear pricing, and fast access to cash.
One of the advantages of using Paypal Loanbuilder is that it doesn’t require Paypal to process payments, unlike Working capital. Moreover, there’s a single fixed fee with no origination fee and no early repayment fees.
To apply for PayPal Loanbuilder, you need to fulfil their requirements, including total annual revenue, business start date, owner’s social security number, Business Tax ID number, and four months of business bank statements.
Business bank statements are only needed if you don’t use PayPal to process payments.
Another important requirement is that businesses should have a Paypal Business account. Although, it’s not necessary to use it to process the payments.
Business finances and credit scores are very important as they are considered for amount, cost, terms, and weekly payment.
What is PayPal Working Capital?
PayPal Working Capital, which is comparable to Merchant Cash Advance, is another financial service provided by PayPal. It offers additional working capital for business. They have their pros and cons.
However, the amount that can be borrowed is up to 35% of the annual sales with a limit of 125,000 USD and terms up to 18 months. Annual sales of the business are conducted by PayPal, which sets the limit and other factors.
The repayment is based on the percentage of daily sales towards the debtor’s PayPal account. Therefore, the use of a PayPal account is necessary for payment processing in all stages.
Moreover, the minimum payment is required after 90 days. PayPal Working Capital gives options of flexible payment, one affordable fixed fee, no credit check, and funding in minutes.
It is based on PayPal’s sales history, so the preferred amount required for business is offered. There’s no need for collateral and a credit check.
The cost of the loan is billed with one fixed fee and no other additional fees. Even the application and funding process has very little time as compared to other services.
The requirement for the services is very simple and includes contact details, birth date, and social security number of primary business owners and managers.
Or you can directly apply for PayPal Working capital with a PayPal Business account with every filled information that includes the past three months’ records of business finances.
Main Differences Between PayPal Loanbuilder and Working Capital
PayPal’s financial services, PayPal Loanbuilder and Working Capital, seem similar but are very different from purpose to repayment structure. However, both aid the finances of the businesses.
But, other utilities and benefits differ from each other.
- PayPal Loanbuilder is a service that provides business-term loans, and on the other hand, PayPal Working Capital offers additional capital for the business.
- In PayPal Loanbuilder, processing payment doesn’t require PayPal, unlike PayPal Working Capital.
- There’s an automatic weekly repayment in PayPal Loanbuilder. In contrast, there’s a percentage of sales deducted from each sale in PayPal Working Capital.
- Repayment in Paypal Loanbuilder should be done in 52 weeks, while for PayPal, Working Capital should be done in 18 months.
- An amount of 500,000 USD can be borrowed from PayPal Loanbuilder, and an amount of 125,000 USD can be borrowed with PayPal Working Capital.
- Funding in PayPal Working Capital is done in a few minutes, unlike PayPal Loanbuilder.
- https://www.sciencedirect.com/science/article/pii/S0267364904000512
- https://search.proquest.com/openview/6d4e24deb12fd7bacb549bdb23b9cac7/1?pq-origsite=gscholar&cbl=43721
Last Updated : 23 August, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
The comparison table is especially helpful for understanding the nuances between PayPal Loanbuilder and Working Capital. It’s great to have all the key information in one place.
This article provides a thorough and informative comparison between PayPal Loanbuilder and Working Capital. It’s helpful for businesses looking to understand their financial options.
I completely agree, the detailed breakdown of the key takeaways and the comparison table make it easy to understand the differences between the two services.
The detailed descriptions of PayPal Loanbuilder and Working Capital provide a comprehensive overview of these financial services. It’s a valuable resource for businesses.
While the article presents a comprehensive analysis, it would be beneficial to include real-world examples or case studies to illustrate the application of these financial services.
The article effectively breaks down the differences between PayPal Loanbuilder and Working Capital. It’s a very useful guide for businesses navigating financial options.
While the article does a good job of outlining the differences, it could benefit from a more critical analysis of the potential drawbacks and limitations of each service.
I see what you’re saying, Tim. It’s important to consider the downsides as well when making a financial decision.
The in-depth explanations of PayPal Loanbuilder and Working Capital are incredibly helpful for businesses seeking financial support. This article is a must-read for entrepreneurs.
The comparison between PayPal Loanbuilder and Working Capital is well-researched and informative. This article serves as a valuable resource for businesses in need of financial solutions.