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Review of PayPal LoanBuilder: Low Revenue Requirements for Working Capital

Review of PayPal LoanBuilder: Low Revenue Requirements for Working Capital

 If you're a business owner who needs operating capital, it's simple to get angry when a lender has severe income and tenure-in-business requirements. However, after using PayPal LoanBuilder, you might feel a little less frustrated.

Low revenue requirements set LoanBuilder apart from its competitors in the finance sector. Before rushing to start a loan application, you should be informed of any potential negatives, such as its hefty flat expenses and not-so-low credit criterion.

In this LoanBuilder review, we'll cover all of that and more to help you decide if a working capital loan from LoanBuilder is right for your business.

For companies with minimal income but good credit, LoanBuilder is ideal.

LoanBuilder has some unusual borrower requirements for an online lender.

On the one hand, it has some of the lowest revenue requirements that we have ever observed. Just $42,000 a year in revenue is requested. In contrast, your usual alternative lender will ask for $100,000 or more, while a traditional lender (a bank or credit union) typically demands $200,000 or more.

In other words, compared to lenders like Lendio, who just require $50,000 annually, LoanBuilder's revenue requirements are incredibly low. Additionally, keep in mind that none of your income comes from PayPal sales. You may apply even without having a PayPal account.

Additionally, it has fairly lax restrictions for the duration of your company's existence. Only nine months of company experience is sufficient for LoanBuilder. Lendio and other lenders will accept startups with a six-month history or less. However, since most internet lenders want a minimum of one year (and traditional lenders require a minimum of two years), LoanBuilder still performs below average.

Given this, it seems odd that LoanBuilder has a somewhat strict credit requirement. A personal credit score of 580 is needed.

That is considered to have a "poor" FICO score and is within the range of what the majority of online lenders desire. Despite the fact that several of the lenders on our list of the best small-business loans offer superior loan terms,

Simply put, there aren't many requirements for borrowers with PayPal LoanBuilder.

Actually, LoanBuilder really only excels with low-revenue companies. Because LoanBuilder loans aren't particularly impressive, you should generally choose another lender if you have more income or better credit.

The list of industries that LoanBuilder forbids is the longest one we've ever seen. Many financial institutions decline to finance enterprises in the adult, marijuana, or gambling sectors. But in addition to these, LoanBuilder also rejects requests from nonprofits, independent contractors, attorneys, and financial services.

We observed a maximum loan amount of $500,000, and we learned from customers that they had been approved for some loans of a moderate size. Despite this, we have seen an increase in reports of smaller loans, specifically those of up to $40,000. As a result, LoanBuilder money can probably help with a range of working capital needs, but it probably won't be enough for bigger projects.

In addition, LoanBuilder does not charge interest on the loaned money, but rather a fixed lending fee. You won't ever get a discount for paying off your loan early because of this. Because fees between 12% and 14% were commonly mentioned by consumers, LoanBuilder is a relatively expensive financing option. On the other hand, LoanBuilder's website provided examples of loans with rates ranging from 2.8% to 187%.

No matter how much you borrow or what the interest rate is, you'll pay it back through recurring weekly withdrawals from your company bank account. The highest borrowing length, as far as we know, is one year; however, shorter terms of up to 15 weeks might be offered.

Those financing rates and terms, while not the worst we've seen, are by no means ideal. Because of this, as we already mentioned, if you have the income to do so, we suggest selecting an alternative lender.

You will, at the very least, have the option to modify your loan if you decide to keep using LoanBuilder.

Making a unique business financing with LoanBuilder

While many lenders will only provide you an offer on a loan that you can accept or reject, LoanBuilder gives you the option to make a few small adjustments.

While the loan amount is predetermined, you will have the choice of a number of loan term lengths using the LoanBuilder Configurator (basically just little sliders that show you how costs change over time).

If you select a shorter repayment time, the fee rate will be lower but the weekly payments will be higher. If you choose a longer payback time, the costs will be higher but the weekly installments will be reduced.

Therefore, if you want the least expensive financing feasible, choose the shorter term with its reduced loan fee. However, if keeping your cash flow in check is more important to you, you can select the loan with the longer term and lower monthly payments.

Despite the fact that LoanBuilder isn't the only lender we've seen doing this, it's still a nice bonus for a loan that isn't very good otherwise.

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