Shane's Review: Paypal's Working Capital Loans - HORRIBLE

Here's a quick warning to any of my small biz friends in the instrument and arts & crafts world:  When Paypal offers to give you a loan, don't do it!

Paypal Working Capital offers loans to qualified users which is set up to automatically pay them back when you get online sales.  Depending on the level of money you borrow, they will take 20-30% of each sale and apply it to the loan.  The sales pitch is that you don't need to worry about big payments because they're deducted automatically.

The short answer review is:  The 20-30% deduction of each sale seems nominal at first, but I can tell you from firsthand experience that this drastically reduces your daily cash flow.  If you're depending on online sales for your income, this Working Capital loan destroys any normalcy in your day to day income.  They're also deducting from the customer's whole order...including the money they pay for shipping!

I took out a Working Capital loan in September of 2019.  The money was used toward band t-shirts and other merchandise prior to the Christmas 2019 season.  I watched the majority of my online income get sucked into the giant Paypal vacuum.  

I paid the loan off today, 10 months later.  I'll never do it again.

Your business is your own.  Perhaps this works for you.  But if you want one friend's piece of advice after a year of frustration, stay away from Paypal Working Capital.

-Shane Speal.  

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