SERVICES OFFERED BY BUILDER
LoanBuilder provides short-term business loans. While many other lenders offer similar financing, LoanBuilder stands out for several reasons: the loans are relatively inexpensive, borrowers don’t have to pay an origination fee (or any other upfront fees), and borrower requirements are low.
HOW IS LOANBUILDER DIFFERENT FROM PAYPAL LOAN?
LoanBuilder and PayPal Business Loans are one and the same. In fact, you may notice that when you start the application questionnaire, the service is called PayPal Business Loan instead of LoanBuilder. At one point there were plans to phase out the LoanBuilder brand, but that hasn’t happened yet.
HOW IS LOANBUILDER DIFFERENT FROM PAYPAL WORKING CAPITAL?
PayPal Working Capital is another business loan service offered by parent company LoanBuilder. Like LoanBuilder, PayPal Working Capital provides short-term business loans.
PayPal Working Capital is a useful tool, but it is only available to PayPal sellers. In contrast, LoanBuilder can be used by most businesses – PayPal sellers or others. LoanBuilder also offers higher possible loan amounts, and the amount merchants can borrow is based on the business’s total revenue (not just its PayPal sales). Check out the next section to see if you have a good chance of getting a LoanBuilder loan.
LOAN STRUCTURE REQUIREMENTS
LoanBuilder has pretty relaxed borrower qualifications, but its list of ineligible industries is quite long and includes lawyers, nonprofits, financial services, and more. Below are the minimum requirements your business must meet to have a good chance of getting a LoanBuilder loan:
| Time In Business: | 9 months |
| Business Revenue: | $42,000 per year |
| Personal Credit Score: | 620 |
Ineligible Industries (click to expand)
Your business must also be based in the United States. Additionally, you must not have any active bankruptcies.
LOANBUILDER INTEREST RATES & FEES
Rating: Good
Here are the current rates and fees for LoanBuilder loans:
| Borrowing Amount: | $5,000-$500,000 |
| Term Length: | 13-52 weeks |
| Borrowing Fee: | One-time fee of 2.9%-18.72% of the borrowing amount |
| Origination Fee: | None |
| Effective APR: | Learn more |
| Collateral: | UCC blanket lien |
LoanBuilder loans are available up to $500,000 for qualified borrowers. LoanBuilder rates are one-time fees ranging from 2.9% to 18.72% of the borrowing amount. While no specific collateral is required to qualify, a blanket lien is required as a condition of receiving a LoanBuilder business loan.
LoanBuilder loan fees are usually not very high. However, the loans have relatively short repayment periods, which means large weekly payments.
LoanBuilder expresses the cost of the loan as a percentage of the total interest. Determining the borrowing fee is easy – simply multiply the total interest percentage by the loan amount. For example, if you borrow $100,000 and have an interest rate of 10%, you will have a $10,000 borrowing fee. In total, you would have to repay $110,000. Note: Total interest percentage is not the same as interest rate or APR. Unlike interest that accrues over the life of the loan, LoanBuilder’s loan fees are calculated only once and remain the same throughout the life of the loan.
In particular, LoanBuilder does not charge an origination (or similar) fee, so nothing will be deducted from the amount of money you receive. Aside from potential late fees or NSF fees, the only fee you’ll be charged is a fixed loan fee. When it comes to LoanBuilder loan fees, they aren’t expensive, but they aren’t the cheapest, and could potentially be as high as 18.72% of the loan amount. The repayment period is quite short, with a maximum repayment period of 52 weeks, which means that this is not a viable long-term financing option and each weekly payment will be significant.
Repayment is hands off. LoanBuilder deducts a fixed amount from your business bank account each week via Automated Clearing House (ACH). It’s worth noting that many of LoanBuilder’s competitors withdraw payments daily, making the LoanBuilder system a bit easier than most plans. You can pay off the loan early without penalty if you choose, but unfortunately there is no financial benefit.
LoanBuilder does not require any specific collateral, but like many online lenders, LoanBuilder does require a UCC-1 blanket lien.
APPLICATION PROCESS
Rating: Excellent
LoanBuilder has a quick and easy application process.
The first step is to fill out the online pre-qualification form. You can choose to sign in with your PayPal account (in which case LoanBuilder will already have some of your information) or as a guest. The application has five steps: Contact Information, Personal Information, Business Location, Business Details and Identity Verification. Overall, LoanBuilder advertises that this form only takes five to ten minutes to complete.
Here’s the type of information you’ll need to provide at each step (note that the information may vary depending on the type of business you run):
- The first step is Contact Info, in which you must supply contact information, such as your name, email address, phone number, and intended use of the loan proceeds.
- Next is Personal Info, in which you must supply your home address and personal phone numbers.
- For Business Location, you will have to submit your business address and business phone numbers.
- For Business Details, you’ll supply relevant information, such as your business entity type, trade name or DBA, state of incorporation, annual business revenue, business start date, number of full-time employees, and business industry and sub-industry.
- On the final section of the loan application, Verify Identity, you will include information such as your date of birth, SSN, what percentage of the business you own, and your federal tax ID. LoanBuilder will use this information to perform a soft pull on your credit, which will give the lender a sense of your credit history. Supplying this information will not affect your personal credit score.
