PayPal’s LoanBuilder gives potential borrowers an exceptionally high degree of transparency, enabling them to view and modify the conditions of their loans even before they sign.
This is a desirable quality in a field where openness and affordability are subordinated to speed and minimal entry barriers.
In this article, we review LoanBuilder as well as the requirements to get a loan from them.
What is PayPal’s LoanBuilder?
LoanBuilder is a PayPal service that allows small businesses to get loans without having to use PayPal to make payments. Small businesses can apply for short-term financing through LoanBuilder. It was first registered under Swift Financial, a business that PayPal purchased in 2017. WebBank is the financial organization that provides the funding, and Swift Financial, which is currently a PayPal affiliate, services the loan.
Short-term business loans from LoanBuilder are interest-free loans that require repayment of a prearranged fixed fee in addition to the borrowed amount. Although the weekly payback option on LoanBuilder’s short-term loan sets it apart from other options, it comes with a lengthy list of ineligible firms and a potentially expensive borrowing cost.
Before this, any qualified business owner could apply for a LoanBuilder loan, which did not require a PayPal account. Many business owners are no longer able to use this funding option because the corporation now requires qualifying businesses to have a PayPal business account.
How does LoanBuilder work?
The $5,000 to $500,000 range in LoanBuilder business loan amounts, with durations ranging from 13 to 52 weeks. The application process is simple and quick, and in certain cases, funding is available the following day.
With LoanBuilder by PayPal, a fixed borrowing fee that ranges from 2.9% to 18.72% of the loan amount is charged in place of a standard annual percentage rate. Thus, your total repayment would be $57,500 if, for instance, you borrowed $50,000 at a 15% cost.
For the duration of the loan term, the payback amount is then split into equal weekly installments. Consequently, you would pay $1,450 every week if the term was 26 weeks.
There aren’t any additional expenses, such as an origination charge or any unstated costs. Only in the event of a late or returned payment—for which there is a $20 fee—would you be required to pay more.
Additionally, one of the best things about LoanBuilder is that you can personalize your loan. When applying for a loan, applicants choose their preferred term and the amount they want to borrow.
As you can see, business loans from LoanBuilder have an easy-to-understand pricing structure. PayPal Business Loans do not require you to use PayPal for payment processing, in contrast to PayPal Working Capital.
Here are a few advantages and disadvantages of PayPal LoanBuilder:
Advantages of LoanBuilder:
- Easy and quick application procedure
- favorable interest rates
- Adaptable terms of repayment
- Within one to two business days, money is transferred into your company’s bank account.
Disadvantages of LoanBuilder:
- Interest rates that fluctuate
- High costs
- Short-term repayment conditions apply.
Note that for companies in need of short-term working capital, PayPal LoanBuilder is generally a viable choice. But before you apply, make sure to check the fees and interest rates offered by rival lenders.
LoanBuilder Requirements
To apply for PayPal business loans, you will need to provide the following information:
- Total annual revenue
- Business start date
- Owner’s Social Security number
- Business Tax ID number
- Four months of business bank statements
Only if you do not handle payments through PayPal are bank statements required. If you do, PayPal’s system will already have this data. You might be required to submit further financial data.
Note that it is not necessary to have a PayPal business account or use PayPal payments to apply for a LoanBuilder loan. A legitimate company checking account is required.
Qualifications
Prospective borrowers have to fulfill the following criteria:
- Nine months or more in business.
- A 620 personal credit score.
- A minimum of $42,000 in income per year.
One of the lowest requirements for this kind of small company loan is the income requirement set by LoanBuilder. In contrast, traditional banks frequently want $200,000+ in annual income, whereas many fintech startups just need $100,000.
How to Apply with LoanBuilder:
Follow these steps to apply.
Step 1: Fill out a 5- to 10-minute questionnaire.
An online questionnaire that supposedly takes five to ten minutes to complete is used to evaluate eligibility. You will answer questions about the purpose of the loan, annual revenue, number of full-time employees, industry, and required business and personal data in the questionnaire.
This will establish your level of pre-qualification. Filling out the eligibility form has no impact on your credit score.
Step 2: Decide on the terms and loan amount.
After completing the pre-qualification process, you will be prompted to provide the terms and amount of the loan that you would like. Your weekly payment amount and costs will be decided by the choices you make.
Step 3: Sign the loan agreement.
After personalizing your loan, you should receive an email from PayPal within five minutes. This email will either include your loan contract or a request for more documentation (bank statements, for example).
Funds may show up in your company bank account the following business day if you sign the agreement and submit the necessary paperwork by 5 p.m. on a weekday. If not, it can take a few working days for the money to show up in your account.
How LoanBuilder deducts payments
PayPal will use an ACH transfer to automatically withdraw money from your business checking account once a week. If you are uncertain whether you will have sufficient funds in your account to complete a weekly payment, you might want to think about rescheduling the day of the week when PayPal deducts the payment. You will be charged $20 if there is not enough money in your account when the payment is due.
For assistance in modifying your fees or weekly payment amount, get in touch with PayPal’s customer support representatives. They might be able to make minor adjustments to your loan to make it more affordable.
Note that repeat clients are eligible for higher loan amounts. You can apply to check whether you qualify for a greater amount or a lower borrowing charge once you’ve paid off your first loan.
LoanBuilder customer service
Phone support is offered for customer assistance from Monday through Saturday. You can also contact support via social media and email. The live chat feature is absent.
Even if clients have previously expressed dissatisfaction with the challenge of contacting a customer support agent, LoanBuilder seems to have made significant efforts to enhance the quality of its customer care, as seen by the majority of recent evaluations. Even though LoanBuilder doesn’t have as many customer assistance channels as its rivals, the company has received a lot of excellent feedback from clients about customer service.
Call 1-800-347-5626 or visit www.loanbuilder.com to find out more about LoanBuilder.
What happens after I apply online?
LoanBuilder will notify you if your application has been accepted and you may proceed with the procedure when you submit it. LoanBuilder assesses your personal credit history in addition to the financials and general health of your business to establish your eligibility. If you are pre-approved, you can choose the length of the loan term and the amount of the loan, as well as the expected rates and costs.
Once your terms have been agreed upon, you must submit a comprehensive application. Depending on the specifics of your company, other evidence may be needed, but you should be prepared to produce a variety of files, including recent bank statements. At this point, LoanBuilder will do a rigorous credit check on you, which could slightly lower your credit score. You won’t get your money until you electronically sign a contract if your loan application is accepted.
What happens after I get a loan from LoanBuilder?
Upon approval, the money will be deposited into your bank account by WebBank, the bank that originated the LoanBuilder loan. If your loan is accepted before 5 PM EDT, Monday through Friday, money will usually move into your account the following working day. The transfer process may take a bit longer if you are approved after 5 p.m. or on the weekend.
LoanBuilder will automatically take weekly repayment installments out of your business checking account. The day of the week that payments are withheld is up to you.
What if LoanBuilder declined my loan application?
LoanBuilder will notify you right away if your loan is denied, and it will send you an email with more information and the reasons why a few days later. Those who didn’t cut can reapply after 30 days.
Is PayPal LoanBuilder legit?
Yes, LoanBuilder is a legit business loan that was established in 2006 by Swift Financial, an independent financing provider.
What credit score do you need for PayPal LoanBuilder?
In the market for short-term loans, LoanBuilder has some of the lowest qualifying standards. The minimal credit score required to be eligible for a LoanBuilder loan is merely 550.
Who owns LoanBuilder?
Swift Financial and LoanBuilder became part of the PayPal family in September 2017.
How much will PayPal loan you?
Your PayPal account history is the main determining factor for the PayPal Working Capital business loan. Apply without a credit check for a $1,000–$150,000 loan (or up to $250,000 for recurrent borrowers).
Can PayPal loan me money?
If a loan is accepted, the procedure is simple: Decide how much you want to borrow. The maximum loan amounts are determined mostly by the history of your PayPal account.
Do PayPal loans build credit?
PayPal Credit isn’t always the ideal option if you want to raise your credit score. If you must obtain credit, take into account alternative offerings such as personal loans or credit cards designed to enhance your credit.
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