PayPal Business Loans Review

Business owners looking for additional funding may want to consider a PayPal business loan as an option.

APR Range
Loan Amount
Based on PayPal account
3.7 / 5.0
SimpleScore PayPal Working Capital 3.7
Median APR N/A
Loan Amount N/A
Product Variety 2
Resources 5
Fees 4

The application process is streamlined, money can be available the next day and you don’t have to put down any money upfront. With options available as small as $5,000 up to $500,000, PayPal loans can help with funding needs of all shapes and sizes. Overall, PayPal business loans fall under the heading of one of the better business loans available.

PayPal was founded in 1998 and is currently operating out of its Pal Alto, CA headquarters under the control of CEO Daniel Schulman. As of the fourth quarter of 2019, PayPal had over 305 million active customers.

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In this article

    PayPal at a glance

    LenderMin. LoanMax. LoanAPY RangeTermsKey Benefit
    PayPal$5,000$500,000Flat-fee pricingNot listedFunding available next day

    What we like about it

    There are several reasons to be excited about a PayPal business loan. First, funding can be made available the next day for up to half a million dollars. The maximum loan size and fast funding make this loan a flexible option that can help with a wide variety of different needs.

    The eligibility criteria for the loan are fair and are laid out by PayPal. While some small business loans or lines of credit require sizeable amounts of annual revenue for approval consideration, PayPal only requires $42,000.

    PayPal also offers a business loan option that is designed for easier approval and repayment works as a percentage of sales. The PayPal Working Capital loan has no credit check and requires no personal guarantee.

    Things to consider

    Many small business loans are set up not to penalize borrowers that want to pay the loan back early. Unfortunately, you don’t get those graces with a PayPal business loan. You will have to pay the entire flat fee (the cost of the loan) no matter if you pay off the loan early or at the end of the term.

    What you need to know

    PayPal loans are available from $5,000 up to $500,000. While term lengths are determined on a case by case basis, it is important to note that repayment occurs every week. Instead of being charged interest on your loan, you’re charged one flat fee that is split up over the life of the loan.

    Technically, this flat fee has the same effect as an interest rate, but PayPal pushes it as being more transparent. It’s also important to point out that there is a prepayment penalty with this loan. Whenever you decide to pay off the loan, the entire flat fee that’s been spread out over the life of the loan is due.

    The company also offers an additional option known as PayPal Working Capital. This option is a loan with easier eligibility requirements and repayment based on a percentage of sales. Two other perks of this option compared to a standard PayPal business loan are that no personal guarantee is required, and there are no early repayment penalties. Additionally, there is no credit check when applying; approval and loan terms are based on your business history. This is a positive for anyone that may be looking for a business loan with bad personal credit.

    Applying for a PayPal business loan is easy and only takes a few quick steps.

    1. Check your eligibility. The PayPal website allows you to get a preapproval in minutes by filling out a short online questionnaire. This process will not hurt your credit score.
    2. Choose your loan terms. Once you are preapproved, you’ll be given a range of repayment terms and the maximum amount you can be approved for. Select the terms and the amount that fit what you need.
    3. Submit any other necessary documents. From there, PayPal will complete the loan underwriting process. During this step, the company may reach out for additional documents. To expedite this step and improve your chances of approval, make sure you have as many financial documents about your business and personal life as ready as possible. The exact documents needed will vary based on your specific situation.
    4. Get paid. Once your loan is ready, you need to sign the agreement, and the funds will be transferred into your PayPal business account.

    Fees and penalties

    The only major fee outlined by PayPal is the flat fee you are charged as the cost of borrowing. The exact amount of the fee is not listed, as it is determined on a case by case basis. Your cost of borrowing will be dependent on your creditworthiness, business history and the terms of your loan. The company does also mention a $20 fee if any payments you make on the loan are returned.

    Eligibility criteria

    There are laid out criteria you must meet to qualify for a PayPal business loan. First, you need a PayPal business account (free to open). You don’t need to process payments through PayPal, but you do need the account. Your business must also have been operating for at least nine months, have at least $42,000 in annual total revenue and be in one of the 550 industries PayPal will service. Additionally, the business owner applying for the loan must have a FICO score of at least 500.

    The eligibility criteria appear to be cut and dry, so there is not much more you can do to increase your chances of approval. That being said, anything you can do to help increase your credit score before applying may help to lower the flat fee you are charged on the loan.


    OnDeck small business loans

    With over $13 billion lent globally and an A+ rating with the Better Business Bureau, OnDeck may be an option to consider. Loans through the company are available for the same amounts as PayPal ($5,000 – $500,000) but follow a more traditional interest-based cost structure. Rates start at 11.89% with repayment terms from 3 months to 36 months. Eligibility requirements are much higher, though, with minimums being 3 years in business, a personal FICO score of 600 and $250,000 in annual business revenue.

    Chase small business loans

    Another option to think about is a small business loan from Chase Bank. As opposed to the PayPal option, the Chase small business loan has monthly repayment options anywhere from 12 months to 84 months. Additionally, if you’re looking for other types of small business funding, Chase Bank offers SBA loan, equipment financing, lines of credit, trade financing and commercial real estate lending.



    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore™

    We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.


    Why do some brands have different SimpleScore on different pages?

    Some brands offer a variety of financial products, which is why they have different SimpleScores on different pages. We rate individual products that brands offer — not the brand as a whole. 

    For instance, in our American Express personal loans review we rated the company a 4.25 out of 5 based on rates, loan amount, customer satisfaction, customer support and fees. In our review of the best small business loan rates, American Express earned a 3.4 out of 5 SimpleScore based on its business loan product. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of each brands’ services and how they compare to competitors’ products.

    Median APR

    Lenders with a lower median APR are awarded higher scores — because even if you’re APR is average, your business is not.

    Maximum loan size

    Lenders that dole out loans with high maximums are also rewarded with higher scores. It takes money to run a business, and businesses need access to as much capital as it takes.

    Product variety

    Need more than just a business loan? Lenders that offer more than one type of financial product for businesses score higher than others that don’t.

    Educational Resources

    We gave out higher scores to lenders that have the following subjects covered in their blogs: loans, marketing, employee and staff, and credit or finance resources.


    Fees can add up fast and eat into operating costs –– that’s why we give a higher score to lenders that have fewer fees.

    Jason Lee

    Contributing Writer

    Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill sets with the rest of the world. Follow Jason on Facebook here

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to,, and elsewhere.