Find money to grow your online business

Find money to grow your online business
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Are you an existing online business looking for money to grow? PayPal may have a solution for you.

The e-commerce business is now offering a financing option for its business customers called PayPal Working Capital.

There is no credit check done of you or your business. PayPal is instead making lending decisions using a proprietary algorithm based on the historical value of your eBay sales and PayPal transactions. So if you have a good revenue stream, they lend you money against future revenue that comes in on PayPal.

As PayPal transactions clear, they siphon off a portion for loan payments. It’s a low risk loan for them because you have a history and they assume you won’t disappear as a seller.

Your maximum loan amount can be 8% of your total sales volume, up to $20,000 annually. The repayment is done as a deduction of anywhere from 10% to 30% of each future sale.

This is a clever path of alternative borrowing, and there’s more and more of this going on. I’ve talked in the past about as another option. Amazon actually beat PayPal to the punch doing this kid of lending in an effort to grow Amazon Marketplace to compete with eBay.

So if borrowing from a bank is not an option, the money you need can still be found other ways.

For further reading:

Clark Howard About the author:
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. More about Clark
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