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by John Mu

PayPal Working Capital-Transforming Small Business Financing

What is PayPal Working Capital?

PayPal working capital is an invite-only Small Business Loan Programme targeted at businesses whose sales transactions are processed via PayPal. As opposed to conventional working capital loans, PayPal loans don’t accrue interest but rather a fixed fee amount which you choose as part of the loan terms during the application process. Based on your sales history, PayPal may extend an invite to you so that you apply for the working capital funding thus boosting your chances of approval.

How does PayPal Working Capital Work?

The small business funding programme from PayPal is offered exclusively to select customers based on their sales history. Once invited, you are then supposed to fill and submit an online based application which includes a confirmation of your information so that PayPal can determine your loan eligibility and selection of your preferred loan amount and terms of payment. Upon approval the loan will be deposited into your PayPal account within minutes.

The amount you qualify for depends on how consistent and substantial your sales have been for the past 12 months of trading. Normally the maximum amount PayPal can loan you is 8% of the sales you made within this period. However, the maximum amount you qualify for can be lower especially if you are a new business or your sales are seasonal and inconsistent.

The working capital loan is recovered from the PayPal sales you make in the course of the loan duration. During the loan application process, PayPal the opportunity to choose the percentage of your sales that should go towards the repayment of your loan. The percentage you choose will determine the fixed fee you will pay on top of the borrowed amount and most certainly the repayment period. The higher the portion of sales you dedicate to loan repayment, the lower the fees you are charged and the faster you repay your loan. That being said, there is a minimum amount (10% of your total loan) you must pay every 90 days even if your sales have been seasonal and volatile.

The convenience of this loan lies in the fact that it is pegged on your PayPal sales which means for the days you don’t make any sales, you do not pay anything. The fee that is charged is first and final; no other charges are levied making this a simple and transparent funding process. Because PayPal already knows your business, there is no personal guarantee required and chances of loan approval are pretty high. The loan doesn’t affect your personal and business credit scores because no credit check is required prior to being advanced the loan.

The only policies you are supposed to live by are that your sales should be processed through PayPal at least until the loan and the fee are paid off in full; you should not avoid or miss payments because this will make PayPal to deduct catch-up payments which can make the repayment process irregular.

What can I purchase with PayPal Working Capital?

With over 220 million active users PayPal is increasingly becoming the preferred mode of making payments online for goods and services. This means with PayPal working capital, you can pay virtually for anything including web design and development services, Google Adwords management services, search engine optimization services, social media services as well as physical merchandise such as clothes, electronics, books, spare parts, machinery and so much more as long as the vendor you are buying from accepts PayPal payments.

How can I find out more about PayPal Working Capital?

PayPal have dedicated an entire section of their website to explain more about this product, how it works, case studies, including an illustration of their pricing and repayment schedule. In case you have any queries, there is a Frequently Asked Questions (FAQs) section you can refer to or better still contact them through their direct line 1-877-981-2163. Their working hours are Monday – Friday, 9am – 8pm Eastern Time. Here is the link to the page https://www.paypal.com/ke/webapps/workingcapital/.

Remember, you can use PayPal to pay for any of our IMD services including our Web Design & Website Development. The only thing you will be required to do is to contact one of our offices and request a PayPal invoice. We offer the best and the most interactive websites that can drastically enhance your web conversion rates. Just click the link below and get in in touch with the office nearest to you.

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