PayPal Working Capital in Australia

PayPal is one of the most recognisable names in the ecommerce payment space. But what you may not know is that they also offer small business loans for ecommerce merchants who sell through PayPal too. Here we provide a full breakdown of PayPal Working Capital so you can review if it’s a good fit for your business. For general information about working capital go here.

PayPal’s headquarter offices, image from

What is PayPal Working Capital?

PayPal Working Capital was launched in 2014 with the aim of making it easier for small businesses to attain the much needed working capital to grow their businesses.

PayPal Working Capital is similar to Amazon Lending and a few other online working capital financing options. Just like Amazon lending works with Amazon, PayPal Working Capital is a small business loan based entirely on your PayPal sales performance history. PayPal offers businesses short-term capital for whatever the reason may be; expanding business operations, buying more inventory or increasing marketing for your business.

But unlike Amazon Lending it’s not an invite only program. Businesses who sell through PayPal are able to apply for PayPal’s Working Capital provided they fit the right criteria (more on that below).

What are the terms of PayPal Working Capital?

The maximum loan amount available to businesses is up to 35% of their annual PayPal sales with a hard cap of $150,000 (AUD) for first time borrowers and $200,000 for repeat borrowers. 

The maximum repayment term for PayPal Working Capital is 18 months. There are no fixed repayment dates per se as PayPal will simply deduct a percentage from future sales until the loan is paid off. When entering into the agreement businesses can choose how much they would like to pay off on each sale between $0.01 – $0.58 per $1. Rather than an accrued interest there is just one fixed amount provided at the point of agreement that businesses are required to pay off from future sales. The smaller you look to pay off per sale the greater this amount will be though. Should you have no PayPal sales there is also a requirement to pay off at least 5% or 10% of your loan every 90 days. 5% for loans that will take longer than 12 months to pay off and 10% for loans set to take under 12 months to pay off.

Is my business eligible for PayPal Working Capital?

Firstly, PayPal working capital is available to small businesses in Australia. 

Then, to be eligible the business must:

  • Have had a PayPal business account for over 3 months
  • Make at least $15,000 in PayPal sales per annum
  • Not have any outstanding PayPal Working Capital loans.

How does PayPal Working Capital compare to other small business loans in Australia?

PayPal Working Capital is mainly praised by businesses for the ease of application and speed in receiving the loan. Providing you meet all of the criteria the application takes just a matter of minutes and if approved money can be received in under 5 minutes. If PayPal is able to meet the times it advertises, then this is certainly some of the fastest processing times in the industry with even the best rated Australian small business lenders taking 1-2 business days for companies like Capify, Lumi, Sail or any of the other quick financing brokers available at Become Business Loans. Which is still significantly faster than your standard bank of course. 

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The majority of users also like the fact PayPal provide a clear fixed fee which is due by the borrower at the onset of the agreement. Businesses know exactly how much they are required to pay back. Some other users though believe this is a ploy as it makes comparisons with APR difficult and allows PayPal to charge higher rates. PayPal working capital does have a sample fee calculator which can be accessed via its 3 step pricing guide available here.


Above,  is an example of a $10,000 loan based on $100,000 in sales per annum at a payback rate of 10% of future sales, so in theory if sales stayed constant the loan would be repaid in exactly a year and $1,529 would be due. Theoretically this would be the same as receiving a 12 month loan at an APR of 15.29%. 

With PayPal Working Capital’s repayment scheme there would be two ways to save money and pay the loan back faster – either a) pay back a larger percentage of your sales or b) organically pay back more with increased sales. So if you’re running a healthy profit margin or have a business which is currently growing then PayPal Working Capital could prove a good fit for you. There are also no early repayment fees.

For borrowers who are looking to borrow the absolute maximum of 35% of annual sales volumes than the fixed fee can be costly, particularly when paying back a smaller percentage of future sales to PayPal. 

PayPal Working Capital has also been criticised by some borrowers for technical issues with the automated approval software. Some borrowers whose circumstances haven’t changed since previous loans have suddenly been rejected by PayPal Working Capital when they were fine before. Whilst others report no changing circumstances but simply apply again the day after and receiving an acceptance instead of a rejection. Overall though, given the speed in which the application can be made and a clear indication of costs at the onset of the loan PayPal Working Capital is worth exploring to see if it’s the right fit.