Here is my experience, its a bit longwinded so bear with me. In a nutshell, I both got a loan and got declined for a loan.
I took out two working capital loans from my paypal business account, paid one off early, took a second larger one out, paid that off early (both loans paid off with a lump sum payment) and declined for a third loan 2 months ago. Code was 646 at first, which is the supposed "fluctuation in sales" code. My business typically slows done in the summer. It just so happens though that I got a strong pick up in business over the last two months though so I kept reapplying. Then the code turned to the 700s, which is supposed to be that you have another loan with them. I do have a personal paypal account, from many years ago when I used to just sell on ebay. I had taken a working capital loan out over a year ago and had a balance. I did a few sales on ebay and then paid off that loan with a lump sum (day 389). I then reapplied for a working capital loan on the business account. Declined, code is 650 (fluctuation). That account has had pretty steady sales over a year, maybe a month in that period that was 20-25% less then the other months. I applied for a working capital loan from my personal account (the day after paying it off). Got approved. Higher repayment rate (30%) but the same amount as the last loan. This is an account where I liquidate the occasional left over inventory from my business. I'll sell a bunch of stuff one month, then not sell anything for 2-3 months. That is fluctuation. But they gave me a loan in that account.
My take on all this is that paypal is going through growing pains/preparing expansion of the working capital product. The computer algorithm is just spewing off codes that in many cases don't make sense. This isn't some "glitch" that all of a sudden in the last 6-8 months has started popping up that they can't figure out. I think they are just not making a lot of loans right now, and probably very few big dollar loans. I think they will either be rolling out another higher margin product, as working capital right now is very cheap to the borrower or they are working on getting more financing, reworking the fee structure and reworking the software. They recently purchased another working capital lending firm, Swift Financial, in order to "bolster their small business loan underwriting capabilities". In a story about the transaction is the following:
"In a memo to PayPal staff, Esch said his company last winter had worked with Swift Financial to build and test a new service, PayPal Business Loan, and was "impressed with their ability to deliver on an unmet need" for mid-market-sized customers larger than current PayPal borrowers. "It quickly became clear that combining our complementary capabilities and people will allow us to accelerate" and fill what he calls a "funding gap" for business cash."
Paypal has lent $3bln through working capital, Swift has lent $1.5bln but their loans tend to be larger then paypal's and then there is also this nugget:
"Swift makes "cash advance" loans and arranges their repayment from borrowers' revenues, at rates similar to credit card rates, which are higher than typical bank business loans. For larger loans, it offers "same-day answer" and next-day cash through bank loans arranged via Celtic Bank of Utah. Compared to bank loans, "it's like Fed Ex vs. the post office" -- you may pay more for quicker service, Harycki said."
So my expectation is to expect laons to start becoming available towards the end of the year (that is when Swift will be integrated into Paypal), probably larger than what you have been offered previously, at probably 2-3x the cost of previous loans.
