PayPal announced that they are offering a new service to its consistent customers. In a matter of minutes customers service representatives can answer the questions that inquiring minds want to know. Does their business qualify for the new ‘Pay Pal Working Capital’? And really, this is not a new idea. Merchant account servicers like firstamericanmerchant.com have been doing this for some years.
How it works
This idea is not new to the payment processing industry, but PayPal is opting to bring it into the light through their venue. They require that you pay a ten percent rate on the money you are borrowing, which is outrageous compared to other merchant processing accounts. At ten percent, if you made $500 that day, you pay back $50.00 on your loan. If you brought in $5,000 that day, you pay $500 on your loan. Other Merchant account servicers are only asking a 1% to 9% on the loan repayment plan. PayPal is a little over the top with their asking price. But, if you don’t make any money, then no payment is made for the day, and this falls in line with all the other merchant account servicers as well.
It’s a good idea
It is a good idea to have a business cash advance if you are in need of it. If you have had something fail like a refrigerator, or you are ready to grow, but you just don’t quite have the total capital that you need, it will help you out. You will pay more than the average loan from a bank, but you get a quicker turn around than you would with a bank, you don’t have to have your credit checked and your payment plan comes right out of your sales that are processed through your merchant account.
Everyday
A certain amount is put into a special account every day after your sales have been calculated. That amount is then used to pay for your loan. Be prepared to have a small delay on your credit card sales as they do this, but know, you will get your money.
Amounts
Loan amounts will range from $1,000 dollars to $20,000 dollars and it sports a maximum of 8 percent revenue of the business, which leaves this a confusing amount. Is it a ten percent payback fee or eight percent? Make certain you know which one before you delve into a contract for this money.
Yes indeed
All the loaning institutions have made it very difficult to borrow for small capital investments like this and what makes PayPal so special? They have deemed it illegal for them to loan out money, and they are partnering with WebBank out of Salt Lake City. This raises another question. The other merchant account servicers are not having that issue, so why is PayPal?
Do yourself and your business a favor, make certain you read all the fine print and all the loan repayment requirements of anyone, before you sign on the dotted line. This really is a simple way to assist your business, just pay attention to what you are getting yourself into, before you make your final decision. And remember, PayPal aren’t pioneers in the business cash load frontier. They just have modified it to be more expensive to pay back.
