PAYPAL LOANBUILDER, A PAYPAL LOANBUILDER SERVICE REVIEW

PAYPAL LOANBUILDER, A PAYPAL LOANBUILDER SERVICE REVIEW: SHOULD YOU APPLY?

Offering short-term loans to small businesses, PayPal LoanBuilder offers a quick and easy application process thanks to no additional fees.

Pros and Cons of PayPal loanbuilder 

professionals

Borrower's eligibility is less than banks

low credit score requirements

no extra charge

The application process is fast and easy

Funds are disbursed quickly

Shortcoming

Not available to businesses in certain industries

No discount for early repayment

No long-term financing options are available

a blanket lien is required

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Observation

PayPal LoanBuilder is a PayPal service that provides loans to small businesses without the need to use PayPal as a payment processor.

LoanBuilder offers short-term business loans, a type of interest-free loan in which borrowers pay a pre-determined fixed fee along with the amount borrowed. Is Small Business Loan From PayPal LoanBuilder Right For You? Read on for the details.

Services offered by the PayPal Loanbuilder

PayPal LoanBuilder issues short-term business loans. These loans provide lump sum capital at a fixed fee. The tenure of short-term business loans is usually less than 18 months.

How is the PayPal LoanBuilder different from PayPal loans?

PayPal LoanBuilder and PayPal Business Loan are one and the same. In fact, you may notice that when you start the application questionnaire, the service is called PayPal Business Loan instead of PayPal LoanBuilder. At one point there were plans to phase out the PayPal LoanBuilder brand name, but this has yet to happen. LoanBuilder and PayPal Business Loan have different landing pages with similar content.

How is PayPal LoanBuilder different from PayPal's working capital?

PayPal Working Capital Loan is another business loan service offered by Builderall's parent company. Like PayPal LoanBuilder, PayPal Working Capital offers short-term business loans.

PayPal Working Capital is a useful tool, but it is only available to PayPal sellers. In contrast, PayPal LoanBuilder can be used by most businesses - PayPal sellers or otherwise. PayPal LoanBuilder also offers the highest possible lending amount, and the amount merchants can borrow is based on the overall revenue of the business (not just its PayPal sales). See the next section to see if you have a good chance of qualifying for a LoanBuilder loan.

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PayPal LoanBuilder Requirements

PayPal LoanBuilder has plenty of comfort in the eligibility of the borrower, but the list of ineligible industries is quite long and includes attorneys, nonprofits, financial services, and more. Below are the minimum requirements for your business to have a good chance of qualifying for a LoanBuilder loan:

Time in business: 9 months

Business Revenue: $42,000 per year

Personal Credit Score: 620

Ineligible Industries (click to enlarge)

Your business must also be based in the United States. Additionally, you should not have any active bankruptcies.

Lender Interest Rates and Fees

Rating: Good

Here are the current prices and fees for PayPal Loanbuilder loans:

Loan amount: $5,000-$500,000

Period Length: 13-52 weeks

Lending Fee: One-time fee of 2.9%-18.72% of the loan amount

Origination Fee: None

Effective April: Learn More

Collateral: UCC Blanket Lien

 PayPal LoanBuilder loans are available to qualified borrowers up to $500,000. PayPal LoanBuilder rates are a one-time fee that ranges from 2.9% to 18.72% of the loan amount. While no specific collateral is required to qualify, a comprehensive lien is required as a condition of obtaining a PayPal LoanBuilder business loan.

PayPal LoanBuilder borrowing fees are usually not very high. However, the repayment terms of the loans are relatively short, leading to large weekly payments.

PayPal LoanBuilder expresses the cost of the loan as a percentage of the total interest. Determining your lending fee is easy -- simply multiply the total interest percentage by the loan amount. For example, if you're borrowing $100,000 and you have an interest percentage of 10%, you'll have a $10,000 borrowing fee. In total, you will have to pay $110,000. Note: The total interest percentage is not the same as the interest rate or APR. Unlike interest, which accrues over the life of the loan, LoanBuilder's lending charges are calculated only once and remain the same for the loan tenure.

Notably, PayPal LoanBuilder does not charge an origination (or similar) fee, so nothing will be deducted from the amount you receive. Aside from potential late or NSF fees, the fixed borrowing fee is the only charge you'll be charged. As for PayPal LoanBuilder's borrowing fees, they are not expensive, but they are not the cheapest either, and can potentially be as high as 18.72% of the borrowed amount. The repayment period is very short, with a maximum tenure of 52 weeks, which means it is not a viable long-term financing option, and each weekly repayment will be significant.

Repayment is off-hand. Each week, PayPal LoanBuilder will deduct a certain amount from your business bank account through an automated clearing house (ACH). It's worth noting that many of LoanBuilder's competitors take out daily payments, making PayPal LoanBuilder's system a little easier than planning. You can pay off the loan early with no penalty if you choose, but unfortunately, there is no monetary benefit to doing so.

PayPal LoanBuilder does not require any specific collateral, but like many online lenders,PayPal LoanBuilder requires a UCC-1 blanket lien.

Application Process

Rating: Excellent

PayPal LoanBuilder has a fast and easy application process.

• The first step is to fill out an online prequalification form. You can choose to sign in / log in using your PayPal account (in which case PayPal LoanBuilder will already have some of your information) or as a guest. The application has five steps: contact information, personal information, business location, business details, and verification identity. Overall, PayPal LoanBuilder advertises that this form takes only five to ten minutes to complete Here's what kind of information you'll need to provide at each step (note that information may vary depending on your business type): The first step is to contact information, in which you will need to provide contact information, such as your name, email address, phone number, and the intended use of the loan amount.

• Next is personal information, in which you will need to provide your home address and personal phone number.
• For the business location, you need to submit your business address and business phone number.
• For the business description, you will supply relevant information, such as the type of your business entity, business name or DBA, state of incorporation, annual business revenue, business start date, full-time number of employees, and business industries and sub-industries .
• On the last section of the loan application, Verify Identity, you will include information such as your date of birth, SSN, what percentage of the business you own, and your federal tax ID. PayPal LoanBuilder will use this information to do a soft stretch on your credit, which will give the lender an understanding of your credit history. Your personal credit score will not be affectrd by supplying this information .

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What happens after I apply online?

On submission of the application, PayPal  LoanBuilder will let you know whether you have been approved to continue with the process. To determine eligibility, LoanBuilder evaluates your personal credit history along with the financial status and overall health of your business. If pre-approved, you'll receive estimated rates and fees, and you'll be able to customize your borrowing amount and tenure.

When you have settled on your terms, you will need to fill out a completed application. Required documentation varies depending on the state of your business, but you should expect to submit a variety of documents, such as recent bank statements. In this step, PayPal LoanBuilder will conduct a rigorous credit check, which may have a slight impact on your credit score. If approved for the loan, you will need to sign a contract electronically before you can receive your money.

I got a loan from a PayPal LoanBuilder now what?

Upon approval, WebBank (the bank responsible for the origination of PayPal LoanBuilder loans) will credit the funds to your bank account. If your loan has been approved before 5 p.m. EDT Monday through Friday, funds will typically be transferred to the next business day. If you are accepted after 5 pm or during the weekend, the transfer may take a little longer.

To repay, PayPal LoanBuilder will automatically deduct the payment every week. You will be able to choose the day of the week on which the payment will be withdrawn.

The PayPal LoanBuilder declined my loan. now what?

If your loan is declined, PayPal LoanBuilder will notify you immediately, and it will follow up a few days later via email with additional details and reasons. Applicants who did not qualify can try again after 30 days have elapsed.

Sales and Advertising Transparency

Rating: Fair

Over the past two years, PayPal LoanBuilder has sharply cut down on the amount of information it provides upfront to potential borrowers. There is still a FAQ that provides some general information about how PayPal LoanBuilder works, but you won't find much information about rates and exact terms. The PayPal Business Loan page provides us with the same information in a slightly different format.

You can quickly check your eligibility by filling out a questionnaire, but this will require you to submit contact information.

Customer Service and Technical Support

Rating: Good

Customer service is available from Monday to Saturday through phone. Support is also available through email and social media. However, there is no facility live chat feature.

Although customers in the past have complained about difficulty reaching a customer support representative, it seems that PayPal LoanBuilder has worked very hard to improve its customer service experience, and recent reviews of the company's customer service experience are positive.

PayPal LoanBuilder Reviews, Complaints, and Testimonials

Rating: Good

Negative reviews and complaints

As a PayPal service, it is difficult to separate PayPal's loan services from all of its other functions. Before PayPal LoanBuilder was a product of Swift Capital. now absorbed by PayPal. Swift Capital's Better Business Bureau profile is still where a lot of complaints about PayPal LoanBuilder come from on the BBB site, so it's worth a look there if you don't want to go through hundreds of PayPal complaints. Swift Capital is not accredited with the BBB, but the site has an A+ rating with 20 complaints over the past 3 years. It also has a good presence on Trustpilot with a score of 4.6/5 with 5,339 reviews. Still, there are some negative reviews. Here is a list of complaints against this service:

Unexpected obstacles: Some customers, either due to miscommunication or accident, said that the application and funding experience became more complex than anticipated.

Confusing Terms: Sometimes being unfamiliar with short-term loan terminology, some customers find themselves unwilling to meet the terms.

Short Repayment Terms: Repayment should be in a maximum of 12 months. It's not a long time. The weekly repayments will be much higher than theirs if you get a more extensive tenor.

Inflexible: Some complaints center on the inflexibility of PayPal LoanBuilder's terms, when they have difficulty meeting a payment schedule or trying to pay off the loan quickly.

COVID-related issues: Several recent complaints include confusion over PPP applications along with difficulty in making payments during the 2020-2021 global pandemic.

Positive Reviews and Testimonials

There are many testimonials on PayPal LoanBuilder's website, lots of positive reviews on TrustPilot, and some positive experiences on the BBB. Customers generally prefer the following:

Fast Time to Funding: Being able to get capital fast has its merits, despite the cost of doing so.

Helpful Customer Service: For the most part, customers seem to be satisfied with the service and support offered.

Weekly Repayment Terms: Most MCAs and short-term loan providers deduct a portion of your sales every day. For many businesses, the weekly deduction is much easier to handle.

Transparent Fees: PayPal LoanBuilder has a few surprises in terms of fees, which is somewhat rare for this type of product.

final call

PayPal LoanBuilder loans are faster, easier, and a little more flexible than your average fintech business loan. PayPal's move from transparency over the past two years has been confusing, and certainly a step in the wrong direction, but the service is one of the better short-term loan offerings out there.

While some borrowers want to look for loans with longer repayment periods, PayPal LoanBuilder has a lot more to offer than just the right type of business. In other words, if your business needs short-term capital, or you can't qualify for financing elsewhere, LoanBuilder is worth including in your comparisons.

PayPal Lender FAQ

Do I need a PayPal account before getting a PayPal LoanBuilder business loan?

No, you do not need a PayPal account to apply for a loan from PayPal LoanBuilder.

Is my business eligible for a PayPal LoanBuilder loan?

You can check your eligibility by visiting PayPal Loanbuilder.com and filling out a 10-minute questionnaire. However, you will need to submit your contact information.

Will my credit be affected by applying for a business loan from PayPal Loanbuilder?

According to the PayPal LoanBuilder website, your credit score will not be affected by applying for a loan.

Are there any hidden charges from PayPal LoanBuilder?

PayPal LoanBuilder does not charge hidden fees. The only charge you will be charged is the lending fee. Additionally, if you miss a payment, you may have to pay late or NSF fees.

Can I get a PPP loan from PayPal Loanbuilder?

The PPP loan program has expired and as of this update, has not been renewed.

Is PayPal LoanBuilder legit?

Yes, PayPal LoanBuilder is a legitimate commercial lender that was created in 2006 by an independent financial company, Swift Financial. Swift Financial was received by PayPal in 2017.

What is PayPal LoanBuilder?

PayPal LoanBuilder is PayPal's business loan product. PayPal LoanBuilder is designed to provide inexpensive business financing solutions for small and medium-sized businesses.