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PayPal Business Account: Do You Need One?

January 13, 2021
PayPal business account Credit Suite

PayPal is a pioneer in the pay online industry.  It allows customers to make and receive payments online.  Better yet, none of the parties have any knowledge of the other’s banking accounts. It’s a secure way to pay and get paid online.  If you are a business, a PayPal business account can help you run and grow your business like never before. 

How Can a PayPal Business Account Help You Run Your Business?

With PayPal business, the ability to accept payments is huge.  This is a well-known and trusted payment platform.  Customers are often more likely to pay if they can do so quickly and easily using PayPal.  It eliminates the need to get up and fetch a card, and they know their information is safe.

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What all Does a PayPal Business Account Offer?

There are many benefits to having a PayPal business account.  First, you have quick access to the money you collect.  It’s available to you within minutes, and you can transfer it to your bank or spend directly from PayPal. 

Also, your customers do not pay a fee to use PayPal for purchases.  They do not even have to have a PayPal account.  You can make payments on all types of devices, including mobile.  Not only that, but your costs are low as well.  PayPal charges a fee for each sale like credit card processors, but there are not extra setup fees.  There are also no fees for withdrawals, statements, or cancelations.

Make Payments

You can make payments yourself using PayPal as well. If your vendors accept PayPal, you can make payments quickly and easily.  This is a secure way to pay online without revealing sensitive information. 

PayPal Business Account: PayPal Working Capital Review

PayPal for businessA huge benefit of a PayPal business account is access to PayPal loans. They offer flexible payments with a fixed fee and no credit check. The no credit check is possible because they use your PayPal business transactions as the basis for approval.  The amount of your loan and fees are all dependent on the amount you collect each year through PayPal.  Furthermore, your loan is repaid as an automatic deduction of collections through PayPal.  That means, as long as you are collecting money through PayPal, they will get their money.

The maximum loan amount is 30% of annual PayPal sales.  Also, it can be no more than $97,000 for a first loan. The third loan can be up to $125,000. Your business can get funding in minutes and there is no early payment penalty.

You must have a PayPal Business or Premier account for 3 months or longer to qualify. You also have to process more than $20,000 in annual PayPal sales if you have a Premier PayPal account.  A regular business PayPal account only requires $15,000 annually to be eligible. 

PayPal Business Account:  PayPal Working Capital Rates, Terms, Fees and Repayment Options

Repayment happens automatically as a percentage of each PayPal sale. The amount depends on your business’s PayPal sales history, your loan amount, and the repayment percentage chosen. A higher payment percentage will lower the fee. 

You can use their calculator tool to get an idea of what fees might look like with different repayment percentages.  It can also help you get a feel for how everything works.  You do have to pay a minimum amount over a 90-day period, which PayPal claims is easily met by most out of the daily sales. However, if there were a 90-day period where you were not able to hit the minimum out of sales, you can log on and make a payment. 

You get to choose what percentage of sales is taken as repayment, which is great.  The calculator will show you several options, but the decision is yours.  Just remember, the larger the percentage the lower the fees. 

Other Working Capital Options

Here are some other options for working capital if you do not qualify for PayPal, or you need more than what they can offer. The SBA wants a 680 or better FICO score.


There are 4 CAPline programs that differ mostly in the expenses they can fund. Each of them carries a maximum amount of $5 million and an interest rate that ranges from 7% to 10%. Funding can take 45 to 90 days. 

The four different programs include: 

  • Seasonal CAPLines -Financing for businesses preparing for a seasonal increase in sales.
  • Contract CAPLines -Financing for businesses that need funding to fill a contract.
  • Builder’s CAPLines -Financing for businesses taking on a real estate or construction project.
  • Working capital CAPLines -Financing for businesses that are struggling with a short-term slump in sales.

There is no minimum time in business requirement unless you are getting a seasonal CAPLine. That one has a one year in business requirement. 

Other SBA Programs that Work Well for Working Capital

The Small Business Administration offers many loan programs that can be accessed to help with working capital needs. Remember that these programs are run through traditional lenders.  However, you will likely go through a much lengthier application process and approval wait times due to the government guarantee requirements. 

7(a) Loans

This program offers term loans up to $5 million. The funds can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other agencies in partnership with the SBA process these loans and give out the funds.

There is a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will work. 

This is by far the most popular of the SBA loan programs, and the funds are available for a wide range of projects, from working capital to refinancing debt, and even buying a new business or real estate.  

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession.


Microloans are available in amounts up to $50,000. They work for starting a business, purchasing equipment, buying inventory, or for working capital. Community based non-profits administer microloan programs as intermediaries, with financing coming directly from the Small Business Administration. 

Another Option for Working Capital: Credit Line Hybrid

A credit line hybrid is unsecured business credit.  It allows you to fund your business without putting up collateral.  You only pay back what you use.  

It’s not as hard to qualify as you may think.  You need personal credit of at least 700.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Also, in the past 6 months you should have less than 4 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  It’s also better if you have strong business credit as well as personal credit. 

However, if you do not meet these requirements you can still benefit!  You can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding. 

Why Choose a Credit Line Hybrid? 

There are many benefits to using a credit line hybrid.  First, you do not have to have any collateral to put up.  Next, the funding is “no-doc.”  This means you do not have to provide any bank statements or financials.  

Not only that, but most times you can even get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business. 

Even better, with the approval for multiple credit cards comes competition.  This makes it easier, and likely even if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months. The process is pretty fast, especially with a qualified expert to walk you through it.  

Credit Card Options for Working Capital

In addition to a PayPal business account with access to PayPal working credit, loans, and the credit line hybrid, business credit cards can be an option.  Funds are easy to access and, in the right situation, rewards can add up nicely.  You definitely want to be sure you are getting business credit cards on your business credit, not your personal credit, however.  

Why?  Because according to the Small Business Administration, business credit card limits are 10 to 100 times that of personal credit cards. This means that you have access to more money when you have strong business credit. Here are a few options to get you started. 


This card has no yearly fee.  You will not need to provide your Social Security number to apply, nor will you need to provide a personal guarantee. They will take your EIN. Yet, they do not work with all industries, so you will have to check to see if yours is eligible

They look at the cash balance of your business, spending patterns, and investors to determine credit worthiness.  They also offer some rewards.  The best part? You can qualify with a FICO as low as 300!

Capital One® Spark® Classic for Business

This one also has no annual fee. However, there is no introductory APR offer either. The regular APR is a variable 24.49%. You can earn unlimited 1% cash back on every purchase for your business, without any minimum to redeem.

While this card is within reach if you have average credit, beware of the APR. Still, if you can pay promptly, and in full, then it’s a good option.

Ink Business Unlimited℠ Credit Card

This is another card with no annual fee, but this one does have an introductory 0% APR for the first twelve months. After that, the APR is a variable 14.74 – 20.74%. 

You can get unlimited 1.5% Cash Back rewards on every purchase made for your company. You will need superb credit to get approval for this card.

Of course, there are many more business credit card options out there.  Do your own research to determine which ones will work best for your business.  Also, remember that details such as approval requirements and interest rates can change often, so check out individual credit card websites for the most up to date information.

Also remember, credit cards are only good for your business if you handle them responsibly.  If you do not pay your bills on time, your fundability and your credit will be affected.  Do not spend more than you can afford to pay back. 

PayPal Business Account: Is it All It’s Cracked Up to Be?

For the most part, those who have a PayPal business account are happy with.  The main complaint that pops up sometimes is that, though they say they have a quick turnaround, it can take up to three days for funds to show up.  That is understandably frustrating, but many seem to feel once they know it and can plan for it, the benefits outweigh this inconvenience. Of course, the only way to know for sure if it will work for your business is to try it out yourself.  It tends to be a better fit for those who do a fair amount of online business.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession.

Take Advantage of Every Opportunity to Fund Your Business

The fact is, whether you have a PayPal Business Account or not, you need to take every opportunity.  If that’s PayPal working capital, great! If it’s one of these other options listed here, that’s great too.  You have to make the best decision for your business.  A PayPal business account appears to be just that for many.  It’s a trusted company that offers low cost business services that benefit both businesses and their customers.  This is priceless in itself.  Customer trust is vital to success. However, having the funds you need to grow is vital to success as well. 

To ensure you give your business the best chance possible, it is a good idea to consult with a business credit expert.  This is someone who can walk you through the process of building fundability and applying for the right kind of business credit for your needs.

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

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