Paypal Working Capital

[pp123]

Does anyone have any experience of PayPal working capital and what opinion are out there on it please?
I am offered almost £10k, with a fixed one off fee of £360.
The repayment of the advance is taken daily, as a percentage of total PayPal sales for the previous day. No minimum repayments and no time limits or late payment fees etc.
What is the feeling amongst the business community about this product? It's quite new in the UK, so I know that there might not be much in the way of feedback.
Thanks

 

[john1989]

My feeling is that I don't know the total amount repayable.

 

[pp123]

10360. The amount of loan, plus the one-off fee.
The fee depends on the percentage that PayPal take from the daily sales. The fee ranges from £360 if they take 30% of sales, up to about £1100 if they take 10% of the sales.
With the 30% option, the loan is repaid within around 4 months. With the 10% option, it will take just over a year

 

[john1989]

You say there's no minimum repayments, but then go on to say the fee is dependent on the % they take from your sales. Which is it?

Also, what happens if you make no sales?

 

[pp123]

From the paypal site:

"Will I be penalised if my sales are slower than expected?
No, we simply take a percentage of your future transactions as repayment until the merchant cash advance and fixed fee are paid in full. There are no penalties if your PayPal sales fluctuate or if you have days without sales. If you continually have slow sales over three months, then we may ask you to repay your balance."

So I understand that there isn't strictly a minimum repayment, except if you have long term lower sales than expected. In our case we are already in expansion. PayPal are using our previous 12 months sales to come up with their expectations. Our previous 12 months include sales from when we were a much smaller business. So, unless something drastic happens, we will be making more sales than they expect.

 

[Raw Rob]

It sounds expensive. Have you worked out how much an overdraft from your bank would cost? A very rough estimate would be that it would cost you about half that, if you paid it back in the same way on a regular basis over 4 months, eg Santander charge an annual interest rate of 5.5% plus a fee of 1% of the overdraft amount.

 

[e-vulture]

I was offered the same but the fee was something like £130 on 1.5K. Not worth it, I can get the same at 0% on a CC.

 

[David Story]

I just got £2500 with £80 fee.

 

[Anne T]

Hi,
New on here, so Hello!
I am on my 2nd PayPal working Capital loan, and I find will not hesitate to take out a 3rd when current loan is paid. You know where you are and can choose the percentage of daily sales you wish to pay back. The one off fee is very reasonable.
Hope this helps.