Would you borrow from PayPal? 1


Bank loan

The PayPal Working Capital fund will be trialled in the UK this autumn, with a more extensive rollout scheduled for 2015. Merchants (including eBay sellers) will be able to repay their advance with a share of their PayPal sales via card payments.

PayPal Working Capital is a loan of a fixed amount, with a single fixed fee. There are no due dates, minimum monthly payments, periodic interest charges, late fees, pre-payment fees, penalty fees, or any other fees. When you apply, simply select the amount you want — up to the maximum you qualify for. You choose the percentage of your sales that will be deducted from your PayPal account. (Deductions are made the day following each day of sales.) You’ll pay this percentage of your sales until your balance is repaid in full. You only make payments when you get paid.

PayPal Working Capital state that Working Capital offers major advantages compared with traditional ways of funding a business:

Funding in minutes – PayPal’s strong relationship with its business customers means we can approve an advance based on their PayPal sales history. This means the customer completes a quick online application – there’s no need to spend hours gathering information about their business. And PayPal can make a decision and provide the funds in minutes.

Pay when you get paid – Unlike traditional bank loans, PayPal Working Capital allows a business to repay the advance with a share of their PayPal sales. If they have a day without any PayPal sales that’s fine – they don’t repay anything that day.

No credit check – PayPal Working Capital is a merchant cash advance against future sales – it’s not a loan – so no credit checks are needed and the advance does not impact on the customer’s business or personal credit record. There is a single, fixed fee that is displayed to the customer before they sign up. There are no interest charges or late payment fees.

Is this something your business will be able to use? or want to use?

steve@bicknells.net

 

 

 

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