The Best PayPal Working Capital Alternatives

Total Rating	4.8
Rates & Fees5.0
Services5.0
Eligibility Requirements4.9
Application4.5
Sales & Advertising Transparency4.4
Customer Service4.9
User Reviews4.9

Pros

Multiple funding types available
High borrowing amounts
Low credit score requirements for some products

Cons

Rates can be expensive
Funds can take a while to disburse
The application process can be slow

What Makes Lendio Great For Most Businesses?

As one of our favorite PayPal Working Capital alternatives, Lendio isn't a direct lender -- instead, it aggregates loan offers from its lender network that are tailored to your particular business, relieving you of the need to seek out lenders individually.

Borrower requirements vary by lender, and the service is completely free to use.

We love that Lendio offers lines of credit, SBA loans, both short- and longer-term loans, and more, while PayPal Working Capital only offers short-term loans. Lendio also offers higher borrowing amounts to qualifying businesses, and due to the range of offers you may get, established businesses with good credit may get lower rates with Lendio than with PayPal.

Lendio Services

Lendio offers the following types of business funding:

Short-term loans up to $500,000
Startup loans up to $150,000
Term loans up to $2 million
Lines of credit up to $500,000
Merchant cash advances (listed as “business cash advances”) up to $1 million
Equipment financing up to $5 million
SBA loans up to $5 million
Business acquisition loans up to $5 million

Lendio Rates & Fees

Lendio’s rates and fees vary depending on the lender and loan type you’re matched with. Get an SBA loan through Lendio, and your Lendio’s options range from low-interest SBA loans to high-interest MCAs for borrowers with bad credit.

Lendio Eligibility Requirements

Lendio’s partner lenders all have their own eligibility requirements that must be met. However, Lendio does recommend that loan applicants have a credit score of at least 550 to qualify for most loan types.

As is the norm with business loans, the more revenue and time in business you have and the higher your FICO score, the more likely it is that you’ll qualify for favorable rates and terms.

When To Use Lendio

You want a range of loan options tailored to your business, drawn from a large and varied lender network
You have a personal credit score of 550+

Get Started With Lendio

BusinessLoans.com: Best For Bad Credit Borrowers

BusinessLoans.com

Get Started With BusinessLoans.com

Total Rating	4.0
Rates & Fees4.6
Services4.0
Eligibility Requirements4.1
Application3.0
Sales & Advertising Transparency3.6
Customer Service4.1
User Reviews4.4

Pros

Funding up to $3 milion
No minimum credit score required
Quick & easy application process
Same day funding possible

Cons

Nontransparent fees & rates
Funding can take a while to disburse

What Makes BusinessLoans.com Great For Bad-Credit Borrowers?

BusinessLoans.com is a business loan marketplace that matches applicants to the loan products they seek -- and which they will qualify for.

We chose BusinessLoans.com as one of our preferred PayPal Working Capital alternatives due to its willingness to work with borrowers with bad credit. If you're struggling to find business funding due to a low FICO score and/or a short time in operation, BusinessLoans.com will still try to match your business with the best possible funding options.

BusinessLoans.com Services

BusinessLoans.com matches applicants to the following loan types:

Short-term loans
Term loans
Lines of credit
Merchant cash advances

BusinessLoans.com Rates & Fees

Your rates and fees will depend on the specific lender and loan product you’re matched with. However, on the whole, BusinessLoans.com’s lending amounts range from $5,000 to $3 million, its shorter-term loans have term lengths of 3-24 months, and its longer-term loans have term lengths from 2-5 years.

BusinessLoans.com Eligibility Requirements

Though BusinessLoans.com doesn’t specify a minimum credit score, the company does recommend that applicants have at least 6 months of business history and at least $100,000 in annual business revenue.

However, even if you fall short of these guidelines, BusinessLoans.com will try to match you with a lending product that can accommodate your business.

When To Use BusinessLoans.com

You want to choose from a range of loan options tailored to your business
Your credit score is fair to poor, and you’re seeking a lender willing to work with you

OnDeck: Best For Fast Funding

OnDeck

Total Rating	3.9
Rates & Fees4.6
Services2.9
Eligibility Requirements3.8
Application4.5
Sales & Advertising Transparency3.8
Customer Service4.1
User Reviews4.0

Pros

Borrower qualifications are lower than with banks
Multiple types of financing are available
The application process is fast and easy

Cons

Financing isn’t available in some states
Rates can be expensive

What Makes OnDeck Great For Fast Funding?

OnDeck may be the most well-known PayPal alternative in the lending industry. OnDeck may be a better choice than PayPal Working Capital for established businesses that need capital quickly. Its application process is fast and easy, and once you accept your loan, you may get funding as quickly as the same business day.

OnDeck is similar to PayPal Working Capital when it comes to term length (up to 18 months with PWC; up to 24 months with OnDeck) and speedy time to funding (same-day funding available from both). OnDeck loans may come with a lower borrowing rate, though, depending on your business's credentials.

Just know that OnDeck's fees can be on the high side, and you need at least fair credit to qualify.

OnDeck Services

OnDeck offers the following loan types.

Term loans up to $250,000 with repayment terms of 18 to 24 months
Lines of credit up to $100,000 with repayment terms of 12, 18, or 24 months

OnDeck Rates & Fees

OnDeck’s term loans have APRs that range from 29.9% to 97.3%, with the average APR being 55.8%. An origination fee of up to 5% may apply.

For OnDeck’s lines of credit, APRs range from 29.9% to 65.9%, with the average borrower paying about 56%. There are no origination fees, but most borrowers will pay a $20 monthly maintenance fee.

OnDeck Eligibility Requirements

To qualify for an OnDeck term loan or line of credit, you must meet these requirements:

Time in business: 1 year
Business revenue: $100,000/year
Credit score: 625+

When To Use OnDeck

Your FICO score is 625+, and you want small business funding as quickly as possible

Get Started With OnDeck

Fora Financial: Best For Merchant Cash Advances

Fora Financial

Get Started With Fora Financial

Total Rating	3.6
Rates & Fees3.2
Services3.5
Eligibility Requirements4.2
Application4.3
Sales & Advertising Transparency3.2
Customer Service2.8
User Reviews3.9

Pros

Applicants with bad credit accepted
Discounts for repaying early
Fast and easy application process

Cons

Rates can be expensive
Some additional fees charged
Repayments are required frequently

What Makes Fora Financial Great For Merchant Cash Advances?

Fora Financial is a PayPal Working Capital alternative suited for quick business financing. This online lender accepts applicants with credit scores as low as 570, making it well-suited to business owners with bad credit who have had difficulty finding funding elsewhere.

Unlike PayPal Working Capital, you can apply for either a merchant cash advance (repaid via automatic daily or weekly repayments, very similar to PayPal Working Capital) or a short-term loan with Fora Financial.

Fora Financial Services

Fora Financial offers the following:

Merchant cash advances up to $1.5 million
Short-term loans up to $1.5 million with terms up to 18 months

Fora Financial Rates & Fees

With Fora Financial’s loans, you’ll pay a borrowing fee of 10-30% of the borrowing amount and an origination fee of 1-4% of the borrowing amount.

Fora Financial Eligibility Requirements

For both merchant cash advances and term loans, Fora Financial requires at least 6 months in business and a credit score of at least 570. As for business revenue requirements, you must generate at least $250,000 in annual revenue to qualify.

Also, there is no maturity date on merchant cash advances — the term ends whenever your advance is repaid from your daily sales.

When To Use Fora Financial

Your FICO score is 570+, and you want a merchant cash advance of up to $1.5 million

National Funding: Best For Startups & Young Businesses

National Funding

Get Started With National Funding

Total Rating	3.7
Rates & Fees3.8
Services2.8
Eligibility Requirements4.3
Application4.8
Sales & Advertising Transparency3.8
Customer Service2.9
User Reviews3.7

Pros

Fast and easy application process
Discounts for repaying early
Funding possible within 24 hours
No collateral required

Cons

Rates can be expensive
Poor website transparency
Frequent repayments required

What Makes National Funding Great For Startups & Young Businesses?

We put National Funding on our list of PayPal Working Capital competitors due to its quick, accessible loans that come with early payoff discounts -- something not many business lenders offer.

Even if your business is just six months old, you may still qualify for a National Funding loan, provided you're on a path to earning $250K+/year.

National Funding Services

National Funding offers short-term business loans up to $500,000 ($400K in some markets) and equipment financing loans up to $150,000.

National Funding Rates & Fees

National Funding’s business loans are short-term loans with factor rates starting at 1.10. You’ll pay a fixed fee of 11-36% of the amount you borrow. You’ll also likely pay an origination fee of 1-3% of the amount borrowed. Also, if you repay your balance in full early, you’ll receive a discount.

National Funding provides few pricing details regarding its equipment financing loans, but the company is currently offering a Guaranteed Lowest Rates promotion on equipment leases. After receiving a quote from National Funding, lessees have 7 days to submit a competing offer. If the offer is valid, National Funding can either beat the competitor’s rate or pay $1,000 to the lessee. Leases must exceed $10,000 to qualify for the program.

National Funding Eligibility Requirements

National Funding states that qualifying applicants should have 6+ months of business history, $250,000+ in annual revenue, and a credit score of 600+.

When To Use National Funding

Your business is young but earning revenue at a healthy clip
Your FICO score is 600+

SmartBiz: Best For Long-Term Loans

SmartBiz

Get Started With SmartBiz

Total Rating	4.7
Rates & Fees4.8
Services4.8
Eligibility Requirements4.8
Application4.5
Sales & Advertising Transparency4.9
Customer Service4.9
User Reviews3.5

Pros

Rates tend to be inexpensive
No prepayment penalties
Website advertising is clear and informative
Customer service is helpful

Cons

The application process can be slow
Some additional fees are charged

What Makes SmartBiz Great For Long-Term Loans?

PayPal competitor SmartBiz is in the business of simplifying SBA loans by matching eligible applicants with the right lenders. Loans procured through SmartBiz can be used for working capital, debt refinancing, or commercial real estate.

While harder to qualify for (only established businesses need to apply), SmartBiz is a great option for established businesses looking for low-cost SBA(7) loans with 10-year terms. Commercial real estate loans are available as well.

In addition to SBA loans, SmartBiz offers other business funding types, all of which can be applied for with just one single application.

SmartBiz Services

SmartBiz offers the following types of business funding:

SBA loans up to $500,000 (10 year repayment terms)
Term loans up to $350,000 (2-5 year repayment terms)
Lines of credit up to $150,000
Custom financing up to $500,000
ERC refunds

SmartBiz Rates & Fees

Interest rates for SBA loans range from 11.25% to 12.25%
Term loans have interest rates starting at 9.99%
Custom financing rates start at 6.99%

SmartBiz Eligibility Requirements

SmartBiz requires loan applicants to have 2+ years of business history. SmartBiz also requires SBA loan applicants to have a credit score of 650 and term loan applicants to have a score of 660.

When To Choose SmartBiz

You want an SBA 7(a) loan you can repay over 10 years, and your FICO score is 650+
You want a regular term loan with reasonable rates, and your FICO score is 660+

LoanBuilder: Best For Short-Term Loans

LoanBuilder

Get Started With LoanBuilder

Total Rating	3.5
Rates & Fees4.1
Services2.9
Eligibility Requirements3.4
Application3.8
Sales & Advertising Transparency3.8
Customer Service2.8
User Reviews4.1

Pros

Lower borrower qualifications than bank loans
No extra fees
Fast, easy application process

Cons

No long-term financing options
A blanket lien is required
A personal guarantee is required

What Makes LoanBuilder Great For Short-Term Loans?

LoanBuilder is another PayPal loan service, but unlike PayPal Working Capital, it is available for PayPal business account users and non-users alike.

Known for low borrower requirements, quick eligibility checks, and no origination fees, LoanBuilder is a great option for businesses looking for short-term loans. It's worth applying with LoanBuilder if you were rejected for a PayPal Working Capital loan, as some businesses may find it easier to get a LoanBuilder loan.

LoanBuilder Services

LoanBuilder offers short-term loans of $5,000 to $150,000, although first-time borrowers may only borrow a maximum of $100,000. LoanBuilder loans are repaid over 17 to 52 weeks.

LoanBuilder Rates & Fees

LoanBuilder’s loans do not feature a traditional interest rate. You’ll instead be charged a one-time fee. These fees are no longer disclosed, but they were previously 2.9%-18.72% of the borrowing amount to give you an idea of what to expect.

With LoanBuilder, there are no origination fees. In fact, according to PayPal/LoanBuilder, apart from the fixed fee, “the only other cost is a $20 Returned Item Fee that is only assessed if a payment is returned.”

LoanBuilder Eligibility Requirements

Your business will need to meet the following requirements to get a LoanBuilder loan:

Time in business: 9 months
Business revenue: $33,300/year

Until recently, LoanBuilder advertised a minimum credit score of 620, but the company no longer lists a minimum credit score.

When To Use LoanBuilder

You’re interested in a business loan from PayPal, but you don’t use a PayPal account to conduct business
You’ve applied for PayPal Working Capital but have been denied

Business Loan & Funding Products Review Methodology

We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.

Weighted Rating Breakdown

Rates & Fees 20%

Services 20%

Eligibility Requirements 20%

Application 15%

Sales & Advertising Transparency 10%

Customer Service 10%

User Reviews 5%

When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.

Rates & Fees: 20% of the total star rating
Services: 20% of the total star rating
Eligibility Requirements: 20% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 5% of the total star rating
User Reviews: 5% of the total star rating

Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.

Read more about how we rate small business lenders.

Reasons Why Your PayPal Small Business Loan Was Declined

Your PayPal Working Capital loan can be declined for several different reasons. When PayPal declines your application, it will send you a letter explaining why you were rejected. This letter usually includes an error code, but from what we’ve gathered, the company isn’t very clear about the exact reason it rejects applicants.

According to PayPal Working Capital applicants, some of the most common problems appear to be:

Trouble verifying information
Abnormal sales
Sale holds or a pending balance on your account
Applying too soon after paying off another loan
Being in a high-risk industry

However, other factors can affect loan approval — being unrealistic about the amount you ask to borrow, for example. When applying for a loan, always make sure your borrowing amount is reasonable, and make sure to show potential lenders exactly how you plan on using the new funds.

Also, don’t forget to complete your application and provide the proper documentation.

PayPal Working Capital Error Codes

Here are the meanings of some common PayPal Working Capital error codes:

Identification Error: The system could not verify your information
Error Code 650: Sales volume fluctuations
Error Code 646: Abnormal sales
Error Code 641: Sales holds or a pending balance on your account

If you get one of these error codes when you apply, you can always attempt to rectify the situation. However, judging by the comments posted by rejected PayPal loan applicants, your efforts may not be successful.

Can I Reapply For The PayPal Working Capital Loan?

Yes. You can reapply for a PayPal Working Capital loan, and it will not affect your credit score. Of course, there’s no guarantee that you’ll eventually be successful if you just keep applying, so at a certain point, it makes sense to start considering alternative funding plans.

PayPal Working Capital Algorithm

How does the PayPal Working Capital algorithm work?

The PayPal Working Capital algorithm verifies your identity and your PayPal account history — this includes your PayPal sales, whether your account has any fund holds or pending balance, and how long your account has been active.

It also checks the status of any previous or existing PayPal Working Capital loans issued to you. The algorithm does not check your credit.

Why aren't I eligible for a PayPal Working Capital Loan?

To be eligible for a PayPal Working Capital loan, you need to satisfy the following minimum qualifications:

Have a PayPal Premier or Business account that’s at least three months old
Process annual sales of $15K/year with a Business PayPal account or $20K/year if you have a Premier PayPal account
Pay off any existing PayPal Working Capital loans before applying for a new one

How many times can you apply for PayPal Working Capital?

There is no stated limit on the number of times you can apply for PayPal Working Capital. Applying once or multiple times will not affect your credit score.

Just keep in mind that if you currently have a PayPal Working Capital loan, you cannot apply for another one until you’ve paid off the first one.

How is PayPal Working Capital calculated?

PayPal Working Capital loan eligibility is calculated primarily on your PayPal sales history and the status of any PayPal Working Capital loans you’ve taken out previously.

If you’re eligible, your loan amount is calculated based on your sales and the number of past loans. PayPal will loan you a maximum of 35% of your annual PayPal sales, capped at $125K for your first two loans, and $200K for loans after that.

How much can I get from a PayPal Working Capital loan?

With PayPal Working Capital, you can borrow 35% of your annual PayPal sales up to a maximum of $125,000 for your first two loans and $200,000 for any subsequent loans.

Does PayPal Working Capital affect my credit score?

No. When you apply for a PayPal Working Capital loan, PayPal doesn’t run a credit check on you. Instead, PayPal bases its decision on your PayPal account history.

Additionally, if you get a Working Capital loan, PayPal doesn’t report your payments to the personal or business credit bureaus, so you can’t build up your credit by repaying your loan.

How To Find Alternative Funding After Having Your PayPal Working Capital Loan Declined

When you get declined for the loan you want, it can feel like a huge setback, to put it mildly. The good news is that there are practical steps you can take to qualify for a different, if not even better, loan. If your application for PayPal Working Capital was declined, try these next steps to get your business the funding you need fast.

Ask Yourself Why You Chose PayPal Working Capital

The first step in your search for a PayPal Working Capital loan alternative is to ask yourself: Why did I apply for a PayPal Working Capital loan in the first place? What aspects of the loan drew me to PayPal Working Capital?

If you chose PayPal Working Capital because it was convenient, look for a loan with an easy application process and quick funding time, such as OnDeck. Did you appreciate the low borrower requirements and the lack of a credit check? You might want to look into the best small business loans with no credit check instead.

By identifying what you liked about PayPal’s Working Capital loan product, you can try to find a lender that offers similar, if not better, financing options.

Identify Your Business Loan Needs

Go on to identify your business’s needs. Ask yourself these questions:

Why do I need the loan?
How much money do I need to borrow?
Can I afford a small business loan?
What is a realistic repayment period for my business?

Before applying for any business loan, you should have a firm grasp of why you need the loan, how much you need to borrow, and what payment terms you can afford. A clear understanding of your business’s needs can help you narrow down your search to find the perfect lender with the best offerings and borrowing requirements. You should also try to understand the debt service coverage ratio to learn how to calculate the max monthly payment you can afford for a loan.

Choose The Right Type Of Business Financing

Choosing the right lender for your business also means choosing the right type of loan. Not all loans are created equal, and not all small businesses are borrowing money for the same reasons. Some businesses may be looking to purchase inventory, while others might need to upgrade their equipment or require a cash flow solution. Some have good cash flow but need extra funds for a new project or building.

Here is a breakdown of the most common types of small business loans and when to use them.

Short-Term Loans

A short-term loan is a sum of money that the borrower pays back in frequent, regular installments over a short time frame.

The unique thing about short-term loans is that there’s no interest rate. Instead, this type of loan has a factor rate — a multiplier used to calculate a fixed fee that gets added to your loan.

Short-term loans are relatively low-risk, making them a suitable choice for many businesses in need of fast funding and ideal for short-term business needs, such as working capital, payroll, inventory, etc.

Installment Loans

Installment loans, also called term loans, are loans where the borrower receives a lump sum of money that they pay back in regular installments (plus interest). Installment loans are ideal for established businesses looking for a more extended repayment period.

Lines Of Credit

When you get approved for a line of credit, a lender gives you access to a credit line with a certain amount of money that you can draw from at any time. Any draws made on a line of credit are repaid in regular installments.

A line of credit is ideal for businesses in need of cash flow solutions or that are looking for a cash cushion to cover unexpected expenses and emergencies.

Invoice Financing

There are two main types of invoice financing: selling your invoices (invoice factoring) or using your invoices as collateral for securing a loan (called invoice financing).

Invoice factoring and invoice financing are ideal for businesses that struggle with cash flow due to slow-paying customers.

Merchant Cash Advances

When you get approved for a merchant cash advance, a cash advance company purchases the business’s future revenue at a discount in exchange for immediate cash.

Merchant cash advances are ideal for short-term business needs, such as working capital, payroll, inventory, etc.

SBA Loans

SBA loans are loans granted by the Small Business Administration and its partners. While these loans are harder to qualify for, they usually have low costs and are ideal for nearly any business need.

Final Thoughts On The Best PayPal Working Capital Alternatives

PayPal Working Capital is the most convenient form of financing available to sellers who use PayPal. However, if you need other options, the seven lenders above are your next best bet.

For more information to assist your shopping journey, our full list of small business loan reviews contains options for just about any business under the sun.

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Jason Vissers

Expert Contributor at Merchant Maverick

Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University and currently lives in Philadelphia, Pennsylvania.

@jvizz_mm

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1. Lendio

❮ ❯

Term loans, short-term loans, SBA loans, MCAs, LOCs, & equipment financing
FICO: 550+ (recommended)
APR: Varies by lender

2. BusinessLoans.com

❮ ❯

Term loans, STLs, LOCs, & MCAs
FICO: No minimum
APR: Varies by lender

3. OnDeck

❮ ❯

Term loans & lines of credit
FICO: 625+
APR: 29.9%+

4. Fora Financial

❮ ❯

Short-term loans & MCAs
FICO: 570+
Fees: 10%+ of borrowing amount + a 1-4% origination fee

5. National Funding

❮ ❯

Term loans & equipment financing
FICO: 600+
Fees: 11-36% of the borrowing amount + a 1-3% origination fee

6. SmartBiz

❮ ❯

SBA loans, term loans, LOCs, & ERC refunds
FICO: 650+ for SBA loans
APR: 6.99%+

7. LoanBuilder

❮ ❯

Short-term loans
FICO: No requirement disclosed (was 620+)
Fees: 2.9%+ of the borrowing amount