SERVICES OFFERED BY LOANBUILDER
LoanBuilder issues short-term business loans. This type of loan offers lump sums of capital at a fixed fee. Short-term business loans typically have term lengths of less than 18 months and are usually repaid daily or weekly.
HOW IS LOANBUILDER DIFFERENT FROM PAYPAL BUSINESS LOAN?
LoanBuilder and PayPal Business Loans are one and the same. In fact, you may notice that when you begin the application questionnaire, the service is called PayPal Business Loan instead of LoanBuilder. At one point, there had been plans to phase out the LoanBuilder brand name, but that hasn’t happened yet.
Currently, LoanBuilder and PayPal Business Loans have different landing pages for the same product with similar content on each website.
HOW IS LOANBUILDER DIFFERENT FROM PAYPAL WORKING CAPITAL?
PayPal Working Capital is a separate business loan service offered by LoanBuilder’s parent company. Like LoanBuilder, PayPal Working Capital provides short-term working capital business loans.
PayPal Working Capital is a useful tool, but it’s based on the amount of PayPal sales processed in the last year, whereas LoanBuilder is based on your overall time in business and credit score.
LOANBUILDER BORROWER REQUIREMENTS
LoanBuilder has recently added a new eligibility requirement — having a PayPal Business Account. The company has also lowered the annual required revenue by almost $10k.
The company no longer discloses a specific minimum credit score, stating that LoanBuilder “requires credit checks because the loan is based on a full picture of your business.” In the past, the minimum was 620, but there’s no advertised minimum now.
| Time In Business: | 9 months |
| Business Revenue: | $33,000 per year |
| Personal Credit Score: | Not disclosed |
Previously, LoanBuilder’s list of ineligible industries was rather lengthy and included attorneys, nonprofits, financial services, and others. While it no longer makes this list readily available, here are the industries that were previously affected:
If your business falls into one of these industries, you may still be able to qualify. You’ll just have to contact LoanBuilder directly to check your eligibility.
Your business must also be based in the United States and not have any active bankruptcies. LoanBuilder also requires both a personal guarantee and a blanket lien.
LOANBUILDER INTEREST RATES & FEES
In the past, LoanBuilder was far more transparent with its borrowing information. Now, the company makes it incredibly difficult to get any information about borrowing amounts, term length, etc., which we took into consideration when rating LoanBuilder as a short-term lending solution.
Because of LoanBuilder’s lack of transparency, the best way to get the most accurate interest rate and fee information is by contacting LoanBuilder directly. However, here are the rates and fees LoanBuilder used to advertise. While these numbers might not be 100% accurate anymore, they can at least give you an idea of what to expect. (Note that the collateral, origination fee, and effective APR information are all still accurate.)
| Borrowing Amount: | $5,000-$150,000* |
| Term Length: | 17-52 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 & Personal Guarantee |
* In the past, LoanBuilder loans were available up to $500,000 for qualified borrowers. Now, LoanBuilder does not advertise a borrowing amount; however, the PayPal Business Loan website lists borrowing amounts as $5,000-$100,000 for first-time borrowers and up to $150,000 for business owners who have borrowed with PayPal Business Loans before. Because PayPal Business Loans and LoanBuilder are the same product with different websites, odds are the change is universal. The best way to find out how much you qualify for is by asking a LoanBuilder rep directly.
LoanBuilder rates are one-time fees and have ranged from 2.9% to 18.72% of the borrowing amount. While no specific collateral is required to qualify, a blanket lien and personal guarantee is required as a condition of receiving a LoanBuilder business loan.
LoanBuilder borrowing fees are usually not too high. However, the loans have relatively short repayment terms, making for large weekly payments. The two main fees are a fixed Total Loan Fee and a $20 Returned Item Fee if your payment is returned.
Note: the Total Interest Percentage is not the same as an interest rate or APR. Unlike interest, which accrues over the life of the loan, LoanBuilder’s borrowing fees are only calculated once and stay the same for the loan term (even if you pay the loan off early, you’ll still have to pay the full Total Loan Fee).[/accordin_item]
Notably, LoanBuilder does not charge an origination fee, so you won’t have anything deducted from the money you receive. As for LoanBuilder’s borrowing fees, they are not expensive, but they’re not the cheapest either and could potentially be as high as 18.72% of the borrowing amount.
Repayment is hands-off. Each week, LoanBuilder will deduct a fixed amount from your business bank account via an automated clearing house (ACH). It’s worth mentioning that many of LoanBuilder’s competitors withdraw payments daily, making LoanBuilder’s weekly payment system a little easier than most to plan for. You can pay the loan off early without penalty if you choose, but unfortunately, there’s no monetary benefit.
LOANBUILDER DISCOUNTS & COUPONS
Some online sites claim that there are LoanBuilder discounts and Loanbuilder.com coupons. However, because Loanbuilder is a lending service, there are no traditional coupons or discounts. The best way to save money on your LoanBuilder loan is to have a strong credit profile to qualify for the best terms possible.
LOANBUILDER APPLICATION PROCESS
LoanBuilder has a quick and easy application process.
The first step is to fill out an online pre-qualification form. You can sign in using your PayPal account (in which case, LoanBuilder will already have some of your information) or as a guest. The application has five steps: Contact Info, Personal Info, Business Location, Business Details, and Verify Identity. LoanBuilder advertises that this form only takes five to ten minutes to complete.
Here is the type of information you’ll have to provide in each step (note that the information might vary based on your type of business):
WHAT HAPPENS AFTER I APPLY ONLINE?
After submitting the application, LoanBuilder will let you know if you’ve been approved to continue the process. To determine eligibility, LoanBuilder evaluates your business’s financials and overall health, as well as your personal credit history. If pre-approved, you will receive estimated rates and fees, and you can customize your borrowing amount and term length.
When you have settled on your terms, you have to complete a full application. The required documentation varies based on your business’s situation, but you should expect to submit various documents, such as recent bank statements. In this stage, LoanBuilder will perform a hard check on your credit, which might have a small impact on your credit score. If approved for a loan, you must electronically sign a contract before receiving your funds.
I GOT A LOAN FROM LOANBUILDER. NOW WHAT?
On approval, WebBank (the bank responsible for originating LoanBuilder loans) will deposit the funds into your bank account. If your loan is approved before 5 PM EDT Monday through Friday, the funds will generally transfer the next business day. If you are approved later than 5 PM or during a weekend, the transfer might take a little longer.
To repay, LoanBuilder will automatically deduct payments every week from your business checking account. You can choose the day of the week on which payments are withdrawn.
LOANBUILDER DECLINED MY LOAN. NOW WHAT?
If your loan gets declined, LoanBuilder will let you know immediately, and it will follow up via email a few days later with additional details and reasons. Applicants who didn’t qualify can try again after 30 days have passed.
If you need immediate small business funds, check out the best same-day business loans instead.
LOANBUILDER SALES & ADVERTISING TRANSPARENCY
Over the past two years, LoanBuilder has sharply cut back on the amount of information it provides upfront to prospective borrowers. There’s still a FAQ that provides some general information about how Loanbuilder works, but you won’t find much information about rates and precise terms. The PayPal Business Loan page provides similar information in a slightly different format and generally has a bit more information on it than the LoanBuilder page.
You can check your eligibility quickly by filling out a questionnaire, but this requires you to submit contact information.
LOANBUILDER CUSTOMER SERVICE & TECHNICAL SUPPORT
Customer service is available by phone Monday through Saturday. Support is also reachable via email and social media. There is no live chat feature.
Though customers in the past have complained about the difficulty of reaching a customer support representative, LoanBuilder appears to have taken great pains to improve its customer service experience, and most recent reviews of the company’s customer experience are positive. Now, LoanBuilder has gotten many positive reviews from customers regarding customer support, despite the company not offering as many support avenues as other competitors.
LOANBUILDER REVIEWS, COMPLAINTS, & TESTIMONIALS
Previously, it was difficult to disambiguate PayPal’s loan services from its other operations. However, the internet has finally caught up with PayPal’s LoanBuilder acquisition, and you’ll find thousands of LoanBuilder reviews. Currently, LoanBuilder: A PayPal Service receives 4.3/5 stars on TrustPilot based on over 5,300 customer reviews.
Let’s take a deeper look at what these reviews say.
NEGATIVE LOANBUILDER REVIEWS & COMPLAINTS
While the majority of LoanBuilder reviews are positive, there are some recurring complaints against this service:
Some of the older negative reviews are related to COVID-19 and issues getting PPP funding.
POSITIVE LOANBUILDER REVIEWS & TESTIMONIALS
LoanBuilder has several testimonials on its website and many positive reviews on TrustPilot. Customers usually like the following:
While LoanBuilder no longer has transparent fees, recent reviews note low interest rates and competitive pricing compared to other lenders. Some reviews also noted that LoanBuilder paused repayments during COVID to help businesses not default on their loans, which created a few very satisfied customers.
FINAL VERDICT: IS LOANBUILDER WORTH IT?
LoanBuilder’s loans are fast, easy, and more flexible than your average fintech business loan. PayPal’s move away from transparency over the last two years is puzzling and a step in the wrong direction, but the service remains among the better short-term loan offerings out there with its weekly repayments and reportedly strong customer support.
While some borrowers might want to look at other top small business loans, LoanBuilder has plenty to offer the right type of business. In other words, if your business needs a short-term infusion of capital, or you can’t qualify for financing elsewhere, LoanBuilder is worth including in your comparisons.
LOANBUILDER ALTERNATIVES
While LoanBuilder can be a great option for short-term loans, it might not be the best fit for everyone. Maybe you don’t qualify for LoanBuilder; maybe you want a longer repayment period or aren’t comfortable with a blanket lien. Or maybe you just want to see all of your options.
Luckily, there are several LoanBuilder alternatives worth considering:
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