While LoanBuilder was created in 2008, the company based in Delaware is a service offered by PayPal, a company with 305 million active registered users that’s been in business since 1998. A LoanBuilder business loan can be available the next day with funding anywhere from $5,000 to $500,000. Borrowers looking for quick funding and transparent pricing will like the model LoanBuilder has created.
Repayment terms on a PayPal business loan through LoanBuilder are all less than a year. This makes the lender a much more useful option for businesses looking for short-term funding for things like purchasing inventory, paying a vendor, plugging a gap in cash flow or solving an immediate need for liquidity.
LoanBuilder at a glance
|Lender||Loan Amount||APR Range||Terms||Key Benefit|
|LoanBuilder||$5,000 – $500,000||Not listed||13 – 52 weeks||Transparent single fixed-fee pricing|
What we like about it
There are quite a few positives that stood out during the LoanBuilder review. The fact that borrowers can get up to half a million dollars in as little as one business day provides a lot of flexibility for business owners in need.
While the company does not post the exact amount it charges for its loans, the transparent single-fee pricing model does simplify the process for borrowers who may be new to taking out a loan. It can be confusing when looking at a traditional loan to figure out how much you’re actually paying as a premium to borrow the money. This is not the case with LoanBuilder’s setup.
Take note, though, you won’t know what that fee will be until you apply for the loan. Other lenders adjust interest rates, fees and repayment terms to mitigate the risk of the loan. As this is the only fee LoanBuilder charges, the actual size of the fee will vary greatly based on your creditworthiness and business.
Additionally, the fee is not collected upfront but is spread out through the life of a loan. In a sense, it operates the same as a loan with interest payments. You won’t need to make a large payment upfront to get access to the needed funds.
Things to consider
Repayment terms on PayPal business loans are short from 13 weeks to 52 weeks. If you’re making a big purchase that you won’t be able to pay back within a year, this is not the loan for you. Individuals that aren’t sure how much money they’re going to need may end up paying more than with other funding solutions if they decide to pay the loan back early. While other lenders have no prepayment penalties, LoanBuilder business loans require payment of the entire fee to close the account.
What you need to know
There is no interest rate on the loan but a single fee that is charged over the life of the loan. The actual fee you’ll pay depends on your business, your needs and what the lender is willing to provide. Be mindful that you will pay the entire fee whether you pay the loan back early or not. Loan repayment terms with LoanBuilder are from 13 weeks out to 52 weeks.
You can apply for a LoanBuilder business loan through the company’s website. The process begins with a general questionnaire that assesses your business’s eligibility and estimates the offers you may qualify for. And while it’s owned by PayPal, LoanBuilder loans do not require a PayPal personal or business account to apply.
Fees and penalties
LoanBuilder business loans are designed to have one single fee as the cost of lending. The fee is not collected upfront, though. It is instead spread out over the life of the loan. While there are technically no prepayment penalties, you are responsible for the entirety of the cost of lending at the time you pay off your loan. Additionally, you will be charged $20 for any returned payments on the account.
How to apply for a LoanBuilder business loan
1. Navigate to the LoanBuilder website and make sure you meet the qualification criteria.
The company does a nice job of laying out the requirements to be considered for lending. You’ll need to be based in the U.S., have been in business for at least nine months, fit into one of over 500 industries served and have at least $42,000 in annual revenue. If you meet these criteria, you can move onto the eligibility questionnaire.
2. Fill out the eligibility questionnaire.
The eligibility questionnaire can be filled out online or over the phone with a company representative. You’ll need to provide basic information about your business, your industry and your primary purpose for needing a loan. When you complete this questionnaire, you’ll get an estimate of what loan terms you may be able to get full approval for. This step takes five to 10 minutes.
3. Complete the full application.
If the estimated loan terms you received from the questionnaire are close to what you’re looking for, you’ll want to continue on and fill out the full application. At this stage, you’ll be notified of the required documents, as it will vary based on your type of business. In some cases, this is nothing more than four months of your business’s most recent bank statements.
Alternatives to LoanBuilder
Borrowers looking for business funding that may not have the best credit still have options. National Funding is willing to approve some borrowers with credit scores as low as 500 for traditional business loans and 575 for equipment financing. Funding can be made available in as little as 24 hours with loans from $5,000 up to $500,000.
For business equipment financing, loans are available up to $150,000. All you need to qualify is six months in business, a credit score over 575 and an equipment quote from a vendor. National Funding has some of the most relaxed requirements industry-wide for loan approval, which makes them a great candidate for borrowers with less-than-great credit.
For people that need really fast cash, Street Shares can get qualified borrowers up to $250,000 same-day. The Virginia-based company is veteran-run and focuses on small business loans for veterans. Term loans are available as little as $2,000 with repayment terms up to three years. The maximum term loan through Street Shares is $250,000. The company also offers lines of credit and contract financing. There is no limit on the size of contract financing offered.
Street Shares is going to be best for veteran-owned businesses but is still an option for companies and people not affiliated with the military. For borrowers who need money today, it also becomes a viable option. While this is only one day faster than LoanBuilder, that can be the difference between keeping the lights on or taking advantage of a time-sensitive deal. Additionally, repayment terms can be several years as opposed to a maximum of one year with LoanBuilder.
The bottom line
The transparency of LoanBuilder and the backing of one of the largest financial companies in the world (PayPal) are two reasons LoanBuilder business loans are attractive. People looking for longer-term solutions or that may pay back the loan early, might save using a different loan provider. But if you’re looking for short-term funding and want transparent pricing, LoanBuilder could be the lender for your business.