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Any business owner understands the importance of working capital. Without this form of capital, running a successful business is nearly impossible. For this reason, many financial institutions offer working capital loans to help business to grow and to stay afloat. Two such institutions are Delancey Street and Paypal. Although both of these institutions offers working capital loans they differ greatly in the way these loans are given and how businesses are expected to repay the loans.
Requirements to Receive a Working Capital Loan: Paypal vs Delancey Street
Paypal’s working capital loans are offered to small businesses that use Paypal and the amount of the loan is based on a minimum of 18% and a maximum of 35% of the annual sales revenue that the business processes through PayPal. The enterprise must have a Business or Premier account for at least 3 months prior to receiving a loan. Additionally, they must have $20,000 in revenue during the prior 12 months to receive a working capital loan. There are no credit checks and the loan is totally dependent upon the amount of revenue the company has generated over the last 12 months. Once approved, the loan amount is placed in the Paypal account within minutes.
Automatic payments are deducted from the Paypal account of the business as a percentage of each sale. Borrowers are required to pay between 5% and 10% of the loan back every 90 days. The fixed payment period is capped at 18 months. If you don’t meet the aforementioned minimum, your loan will go into default. For the most part, businesses are able to cover their minimum payments without defaulting.
Delancey Street working capital loans differ in that any small business can receive a loan regardless of how credit card payments of processed. Paypal only offers loans to businesses that are Paypal members. Delancey Street offers two types of working capital loans including the merchant cash advance and accounts receivable factoring. The merchant cash advance provides the business owner with a lump sum and requires the borrower to repay the loan utilizing a fixed percentage of daily credit card sales. This percentage is taken until the balance of the loan is repaid. These automatic payments are only deducted when sales are made. This type of loan allows businesses to take advantage of any opportunities that may arise that will allow them to take the business to the next level. This is the most popular type of working capital loan.
The accounts receivable factoring loan offers borrowers money based on unpaid invoices. With this type of loan, USC pays off the debt directly and then collects the amount of the loan from the borrower. This type of loan is extremely useful for new businesses that need equipment and supplies to keep the business running and to ensure long-term profitability.
Delancey Street offers funding terms that span from 3 to 10 years. Loan rates start at 9% and loan amounts range from $10,000 to $5 million. Funds can be paid out in 1 to 3 days after loan approval. Delancey Street is also willing to work with business owners that don’t have perfect credit so that they are able to secure a loan.
Indeed, Paypal and Delancey Street differ greatly in the way they offer working capital loans. The main benefit of Paypal is the quickness with which the loan can be granted and the structure of the automatic payments. The primary benefit of Delancey Street working capital loans is that any small business can apply and they have longer to pay the loan back. The loan term for Paypal is only 18 months whereas Delancey Street gives borrowers a minimum of 3 years and a maximum of 10 years to pay a loan back. The longer loan term gives the business a chance to produce steady profits prior to paying the loan back.
Each business offers working capital loans that can be useful to small and medium-sized businesses. The business owner has to decide which loan is more feasible and ideal for their enterprise.

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