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PayPal Small Business Loans: 2024 Review

Updated Dec 18, 2023

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At a glance

4.2
Rating: 4.2 stars out of 5
Bankrate Score
Caret Down
Accessibility
Rating: 4.8 stars out of 5
Affordability
Rating: 2.8 stars out of 5
Customer experience
Rating: 5 stars out of 5
Transparency
Rating: 4.4 stars out of 5
Flexibility
Rating: 3.8 stars out of 5
How Bankrate Scores work Arrow Down

Overview

PayPal was founded as a digital payment processing platform in 1998. In 2013, PayPal launched its first business loan product, working capital loans. It also now offers fixed-term business loans.

Lender Details

  • Moneybag

    Loan amount

    $1,000-$250,000

  • Rates

    Interest rate

    N/A

  • Clock Wait

    Term lengths

    17-52 weeks

  • Dollar

    Min. annual revenue

    $15,000

  • Business

    Min. time in business

    3 months

Who PayPal is best for

PayPal business loans are best for small businesses that have low annual revenue and an active PayPal business account. PayPal working capital loans don't require a credit check, and the business loan’s minimum credit score is only 580. So it's also a good choice for business owners who may have bad credit or a limited credit history.

Who PayPal may not be best for

PayPal business loans are not a good choice for businesses that need a large amount of funding. First-time borrowers are limited to $100,000 for business loans and $150,000 for working capital loans. Loan amounts increase for repeat borrowers — up to $150,000 for business loans and $250,000 for working capital loans.

Additionally, though PayPal's website doesn't disclose its total loan fee percentages, it's possible that well-established businesses could find lower borrowing costs with a traditional lender. Before applying, make sure you understand the various costs of small business loans and compare multiple lenders to make sure you apply for the most affordable business loan.

PayPal: in the details

PayPal pros and cons

Pros

  • Checkmark

    Fast funding process

  • Checkmark

    Low revenue threshold

  • Checkmark

    Low minimum loan amount

Cons

  • Not available nationwide

  • Fees not fully disclosed in advance

  • PayPal business account required

Business loan types offered

Loan quick facts

  • Amounts: $5,000 to $100,00 for first-time borrowers; max $150,000 for repeat borrowers
  • Terms: 17 to 52 weeks
  • APR: N/A — total loan fee instead

PayPal business loan overview

PayPal requires a personal credit score of at least 580 and at least nine months in business for its business loans. You’ll also need a PayPal business account. If approved, funds will be deposited into your PayPal business account as soon as the next business day. Payments are automatically deducted weekly from your bank account. In place of an interest rate, companies are charged a fixed fee — though you must apply to learn the amount. 

In addition to the fixed fee, PayPal charges a $20 fee for returned payments. As with many small business loans, you must provide a personal guarantee.

Loan quick facts

  • Amounts: $1,000 to $100,000 for first-time borrowers; max $250,000 for repeat borrowers
  • Terms: No set term
  • APR: N/A — total loan fee instead

PayPal working capital loan overview

With PayPal’s working capital loan, you receive a lump sum, funded in minutes. A fixed fee set after you apply replaces the traditional interest rate. You then repay both with a percentage of each sale processed through PayPal. If you don’t have any sales, you won’t have to make a payment. But if you don’t make a payment every 90 days, your account will fall out of good standing. 

Approval for PayPal working capital loans is based on your company’s PayPal business account history — there’s no credit check. Your PayPal business account must be at least 90 days old. You must process at least $20,000 in annual PayPal sales if you have a PayPal Premier account. For business accounts, the sales requirement drops to $15,000.

Do you qualify? 

Minimum requirements differ between PayPal's two business loans. 

For a PayPal working capital loan, you need:

  • To have a PayPal Business or Premier account for 90 days or more
  • To process a minimum of $20,000 in annual PayPal sales if you have a Premier account, or a minimum of $15,000 in annual PayPal sales if you have a PayPal Business account
  • To pay off any existing PayPal Working Capital loan

For a PayPal small business loan, you need: 

  • To have at least nine months in business
  • To have an annual revenue of at least $33,300
  • To have a PayPal Business account
  • A personal guarantee is required for small business loans.

Additionally, you’ll have to live in an area PayPal serves. Working capital loans aren’t available in Nevada, North Dakota or South Dakota. Business loans aren’t available in Hawaii, Nevada, North Carolina, North Dakota and South Dakota.

What we like and what we don’t like

A PayPal business loan is geared toward small businesses with low-volume sales and startup companies that may have difficulties securing a loan at a traditional bank.

What we like

  • Fast funding process: For PayPal working capital loans, funds can be in your account within minutes, while for business loans approved by 5 p.m. ET, funds can be available as soon as the next business day.
  • Low revenue threshold: For working capital loans, the minimum revenue requirement starts at $15,000 in PayPal sales, while for business loans, the company needs $33,300 in annual revenue. 
  • Low minimum loan amount: Businesses can borrow as little as $1,000 for the working capital loan and $5,000 for the business loan. 

What we don’t like

  • Not available nationwide: Working capital loans aren’t available in Nevada, North Dakota or South Dakota. Business loans aren’t available in Hawaii, Nevada, North Carolina, North Dakota and South Dakota.
  • Fees not disclosed: The amount of the fixed-rate fee is not disclosed until you check your eligibility or apply, making it difficult to compare with other lenders.
  • PayPal business account required: Not only must you have a PayPal business account, but for a working capital loan, you must make sales through that account.

How PayPal compares to other lenders

PayPal stands out by providing flexibility and quick access to funds for businesses heavily reliant on PayPal transactions. 

While competitors may have different eligibility criteria, interest rates and loan terms, PayPal's unique approach appeals to businesses seeking financing options tailored to their PayPal sales performance. 

Rating: 4.2 stars out of 5
4.2

Bankrate Score

  • Loan amount

    $1,000-$250,000

  • Interest rate

    N/A

  • Term lengths

    17-52 weeks

  • Min. time in business

    3 months

  • Min. business annual revenue

    $15,000

Rating: 4.6 stars out of 5
4.6

Bankrate Score

  • Loan amount

    $5,000-$250,000

  • Interest rate

    52.60%-60.90% average APR

  • Term lengths

    12-24 months

  • Min. time in business

    1 year

  • Min. business annual revenue

    $100,000

Rating: 4.4 stars out of 5
4.4

Bankrate Score

  • Loan amount

    Up to $250,000

  • Interest rate

    6.20% Simple interest

  • Term lengths

    6 or 12 months

  • Min. time in business

    2 years

  • Min. business annual revenue

    $480,000

PayPal vs. OnDeck

Both Paypal and OnDeck offer a streamlined application process and fast funding, making them appealing to businesses in need of immediate capital. However, since PayPal business loans are only available to businesses with an established PayPal sales history, not all businesses are eligible. 

OnDeck can be a viable alternative for all businesses, including startups facing challenges in securing financing elsewhere. This lender offers business lines of credit from $6,000 to $100,000 and term loans ranging from $5,000 to $250,000. 

With the shorter loan terms of 12 to 24 months, depending on the loan type, how much you borrow and the interest rate, you run the risk of defaulting if you can't keep up with the high monthly payments. Additionally, a minimum annual revenue of $100,000 is required, but sales don't have to be processed through PayPal. 

PayPal vs. Bluevine

PayPal and Bluevine offer different financing products to businesses that could be a good fit, but this depends on your needs. PayPal is a good fit for businesses that primarily rely on PayPal for their revenue.

If you're not set on a business loan, Bluevine could be a great alternative, as it offers business lines of credit up to $250,000 with terms ranging from six months to one year. This is a suitable choice for fair credit businesses in need of ongoing working capital or cash flow management. But the 12-month term approval requires a high annual revenue of $960,000. 

How to apply for a loan with PayPal

For a business loan, you start by logging in with your PayPal account to check your eligibility. For a working capital loan, PayPal has an online application process that should take only five to 10 minutes. Most applicants won't need to provide many documents, just basic information about the business and its owners.

Questions? Call 877-981-2128 between 9 a.m. and 8 p.m. ET, Monday through Friday.

PayPal frequently asked questions

How Bankrate rates PayPal

Overall Score 4.2
Accessibility 4.8 PayPal offers fast funding time, flexible loan amounts and achievable credit requirements.
Affordability 2.8 PayPal’s lack of upfront transparency around fee amounts drags this score down.
Transparency 4.4 It’s easy to tell whether your business is likely to qualify for these loans without a hard credit check.
Customer experience 5.0 With six-day-a-week customer support, an easy online application and a handy app, PayPal lands a perfect score.
Flexibility 3.8 PayPal offers two loan types, but once you’ve set your payment schedule, you’re locked in.

Methodology

Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
22
loan features weighed
Rates
770+
data points collected

To select the top small business lenders, Bankrate considers more than 20 factors. These factors include loan amounts, approval and funding times, credit requirements, APR or factor rate ranges, fees, and easy-to-find rate and fee disclosures. Bankrate reviewed more than 30 lenders and gave each a rating, which consists of five categories:

  • Accessibility: Factors considered in this category include minimum loan amounts, approval and funding speed, minimum annual revenue and minimum credit score.
  • Affordability: This section measures interest or factor rates and fees.
  • Transparency: How easy it is to find important rates, fees and eligibility requirements are considered in this category.
  • Customer experience: Customer service hours, online applications and app availability are considered in this category.
  • Flexibility: This category considers factors like the number of loan products and ability to change payment due date.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.