Online payment services have gotten into small-business lending through working capital loans, but did you know ecommerce payments giant PayPal also offers a more traditional flavor of lending?
A reader forwarded us a marketing email PayPal has been sending online sellers touting PayPal Working Capital and PayPal Business Loans. “I see that there is another product besides Working Capital. It allows for weekly payments instead of a per sale cut,” the reader wrote.
The email linked to a landing page that touted the benefits of PayPal’s two lending products – “Fast access to cash at a competitive price can be a game changer for your business. Whether you need help stocking up on inventory or bridging a cash flow gap, PayPal can help you access the financing you need to move your business plans forward.”
The landing page went on to describe the two offerings as follows:
PayPal Business Loan
A fixed term loan based on a full picture of your business with a predictable, weekly payment. Processing payments with PayPal is optional.
PayPal Working Capital
Based primarily on your PayPal Business account, automatically repay the loan with a percentage of PayPal sales.2 No credit check required.
The EcommerceBytes reader also noted that the email stated, “Processing payments with PayPal is optional,” which they believed was “likely directed at eBay Managed Payments.”
As we reported in this post, PayPal told sellers they would be out of compliance with their Working Capital provisions if they were participating in eBay managed payments, while eBay reportedly encourages such sellers to pay off their PayPal loans by turning to rival Square Capital, with which eBay has partnered.
It seems that while eBay and PayPal remain dependent on each other, they’re also becoming rivals.
Kabbage made working capital loans for online merchants popular, and there are many other alternatives, including those from Square and Payability. And Amazon offers its own lending service for its sellers.
As a reminder, PayPal also lends to buyers through PayPal Credit. It’s currently promoting an offer of interest-free credit on purchases of $99 or more if paid in full in 6 months “when you check out with PayPal and choose PayPal Credit,” subject to credit approval.