Working capital loans bad credit is a topic of interest to many business owners.
At Financing Your Way, we aim to offer education and support for small businesses in all industries. Here’s our take on the PayPal Working Capital Loan system.
How to Qualify for a PayPal Working Capital Loan
PayPal working capital loans are an option for small businesses who use PayPal as their merchant service provider. PayPal allows businesses to accept debit and credit cards as a form of payment for transactions. Opening a PayPal merchant account is extremely easy, but customers tend to hesitate when making a purchase at a business that only accepts payments through PayPal. As you begin to accept transactions, PayPal monitors your activity. If your business is doing well or generating more than $10,000 or more a month for a consistent period of time, you will be offered the PayPal working capital loan. You will be prompted to fill out an application and within a day or two, you will see an offer with options for the loan amount and payback rate.
Understanding the Interest Rates
PayPal working capital loans are factor loans. This means that PayPal will take a percentage of your future sales in order to pay the loan balance back. You have the option of selecting the amount of the loan and the percent of each sale that PayPal will take. Higher loan amounts have higher repayment percentages.
The Downsides of PayPal Working Capital Loans
PayPal acts as a merchant service provider and the lender, but they do not report the loans to the credit bureaus. This means paying the loan off and staying in good standing doesn’t improve your credit score. If you are interested in working capital loan bad credit options, then it is important that you choose a working capital loan that can improve your credit score.