This isn’t new, but, it may have been unheard of up until now. For business owners, borrowing money from traditional banking sources has become a thing of the past. Why? Because of the tedious requirements banking institutions set forth for applicants applying for a business loan. These mandatory requirements (i.e. loan application, tax returns, P&L statements, etc) take time to pull together and “time” is not always available. Some small business owners run into a situation where capital is needed immediately. It may be to cover the costs of goods/products or to help with payroll, for example. Whatever the need, using a traditional method to gain those immediate funds is no longer the reasonable way to go. Business owners have the capability now to apply for a loan without the hassle of unnecessary paperwork. PayPal, for instance, allows borrowers to secure funding based solely on their business history. Instead of background checks, credit checks, co-applicants, etc, PayPal strictly uses sales history to determine if an applicant is capable of paying off the loan. PayPal doesn’t mind lending up to $85,000 to borrowers who’s business has brought in plenty money to them. The more business transactions that occur via PayPal, the more likely a borrower will be approved for funding. In most cases, borrowers can receive up to 15 percent of their sales in the past year. PayPal is paid back by collecting 10 to 30 percent of the borrower’s daily sales until the loan is paid off. PayPal’s Working Capital program was established in 2013. It is reported that over 60,000 merchants use this funding source. The great thing about the program, too, is that merchants can borrow several times (as each loan is paid off).
