The idea is good, but the actual product is awful. I've obtained approximately 8 PayPal Working Capital loans within the last 4 years ranging from $8,000 to $20,000. In the beginning, it was great. There was a small fee and just as their advertisement stated, you only paid upon sale transactions.
Every loan was paid-off within a few months. I would pay-off an $8,000 loan in two to three months tops. I obtained a $20,000 loan in Aug 2015. PayPal added $2,000 in fees to the loan, making it $22,000. ...
As of April 2016, approximately 8 months later, I received a call from Working Capital informing me that a minimum payment of $1,900 is required every 90 days and I had only paid $1,700 to-date and was required to pay $200 more by the deadline within the next 3 weeks.
I was pissed when I got that call. I know I should have read every single part of the fine print and know PayPal Working Capital would be the type of company to change their policy drastically and not advertise the change. PayPal was continuously misleading the public with their advertising, stating one is not required to make monthly payments, but instead, they only pay when they make a sale. They further stated how that makes them so different from banks and lenders. The lady I spoke to that day was rude and had zero customer service skills. She kept telling me it was in my contract and could really care less. I know it's my job to read the fine print. But, PayPal Working Capital also has a legal obligation not to mislead the general public with false advertising.
Following that call, I decided to stop using PayPal for most business payments and went to Square. I was so pissed at PayPal following that call. With me, it was not a financial issue. It was principle. By the time of the call in April 2016, approximately 8 months after obtaining the loan, I had already paid $15,000 towards the loan. From that point-on, PayPal Working Capital was the least important account and company of all my accounts and vendors.
Later, PayPal Working Capital decided to deactivate my PayPal debit card until I pay the entire amount which is approximately $2,200. I'll pay it off and never do business with PayPal again. It's no loss to me. This product is not monopolistic competition. There are many better competitive alternatives out there.
I would have been way better-off obtaining a 3% 36-month loan from a bank. The total interest would have been approximately $900 for the 36-month term or $1250 for 4%. Either way, it would have been way better than what PayPal Working Capital offers. The fees (what PayPal charges instead of interest for $20,000 was $2000; twice the amount of the 3% interest a bank would charge).
This whole thing about "pay only when you make a sale" is a total crock! If they required a minimum payment of $1900 every three months, then this loan is really an 30 month loan!