Services Offered By Loan Builder
Short-term business loans are provided by LoanBuilder. LoanBuilder stands out from the crowd despite the fact that many other business financiers provide comparable funding because the loans are reasonably priced, borrowers don’t have to pay an origination fee (or any other upfront fees), and borrower requirements are minimal.
How Is Loan Builder Different From PayPal Loan?
There is no distinction between LoanBuilder and PayPal Business Loans. In fact, you might notice that the service is referred to as PayPal Business Loan rather than LoanBuilder when you start the application questionnaire. The LoanBuilder brand name was once intended to be phased out, but that hasn’t happened yet.
How Is Loan Builder Different From PayPal Working Capital?
The parent company of LoanBuilder also provides another business loan service called PayPal Working Capital. PayPal Working Capital offers short-term business loans, just like LoanBuilder.
A helpful service, PayPal Working Capital is exclusively accessible to PayPal sellers. In contrast, Loan Builder is accessible to most companies, including PayPal vendors. Additionally, Loan Builder offers larger maximum borrowing quantities, and the maximum sum that merchants may borrow is determined by the total income of the company (not just its PayPal sales). To find out if you have a decent probability of being approved for a Loan Builder loan, read the next section.
Loan Builder Borrower Requirements
Although the requirements for borrowers at LoanBuilder are fairly lax, the list of excluded sectors is rather long and includes businesses like law firms, charities, and financial services, among others. The minimal criteria that your company must satisfy to stand a good chance of being approved for a LoanBuilder loan are listed below:
|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.
Loan Builder Interest Rates & Fees
Here are the current rates and fees for Loan Builder loans:
|Term Length:||13-52 weeks|
|Borrowing Fee:||One-time fee of 2.9%-18.72% of the borrowing amount|
|Effective APR:||Learn more|
|Collateral:||UCC blanket lien|
For qualifying consumers, LoanBuilder loans are available up to $500,000. The one-time costs for LoanBuilder range from 2.9% to 18.72% of the borrowed amount. A blanket lien is necessary in order to be eligible for a LoanBuilder company loan even though particular collateral is not needed.
Borrowing costs with Loan Builder are typically not excessive. The loans’ short repayment periods, however, result in high weekly instalments.
The cost of the loan is expressed by Loan Builder as a Total Interest Percentage. Simply multiply the Total Interest Percentage by the borrowed amount to find your borrowing cost. If you borrow $100,000, for instance, and the interest rate is 10%, your borrowing cost will be $10,000. You would have to pay back $110,000 in total. The Total Interest Percentage is not the same as an interest rate or annual percentage rate (APR). Loan Builder’s borrowing fees are computed just once and remain the same throughout the loan period, unlike interest, which builds up over the course of the loan.
Notably, LoanBuilder does not impose an origination (or comparable) fee, thus your payment will not be reduced in any way. You will just be charged the flat borrowing fee; you won’t be assessed any late or NSF fees. The borrowing fees charged by LoanBuilder are not the most affordable, but they are also not the most costly, and they might reach a maximum of 18.72% of the borrowed amount. The maximum term of 52 weeks for repayment indicates that it is not a practical long-term financing option, and each weekly repayment will be significant.
Repayment is automatic. A fixed amount will be taken out of your company bank account each week by LoanBuilder via an automated clearing house (ACH). It’s important to note that many of LoanBuilder’s rivals withdraw payments every day, making LoanBuilder’s method simpler to plan for than others. There is no financial advantage to paying off the loan early, but you are free to do so if you so want.
Although Loan Builder does not demand any specific collateral, it does demand a UCC-1 blanket lien, like many other online lenders.
Loan Builder has a quick and easy application process.
Filling out an online prequalification form is the first step. You have the option of logging in as a guest or by using your PayPal account, in which case LoanBuilder will already have part of your information. Five steps make up the application: Contact Information, Personal Information, Business Location, Business Details, and Identity Verification. Overall, LoanBuilder claims that completing this form will just take five to 10 minutes.
The information you must supply will depend on the type of business you operate; nonetheless, the types of information are as follows:
- The first stage is Contact Info, where you must provide your name, email address, phone number, and the purpose for which you want to spend the loan earnings.
- The Personal Info section requires you to enter your home address and mobile numbers.
- You must provide your business address and phone numbers for business location.
- When filling out the Business Details section, you must include pertinent details about your company, including its legal structure, trade name or DBA, state of incorporation, annual income, start date, number of full-time employees, and industry and sub-industry.
- You must fill out the Verify Identity portion of the loan application, which asks for details about your date of birth, Social Security number, ownership stake in the company, and federal tax ID. With the help of this data, LoanBuilder will run a soft credit check to provide the lender an idea of your credit history. Your personal credit score will not be impacted by providing this information.
What Happens After I Apply Online?
When you submit your application, LoanBuilder will let you know whether you’ve been given the go-ahead to move on or not. LoanBuilder assesses your personal credit history, your business’s financial standing, and its general health to establish your eligibility. You can choose your loan amount and term duration if you are preapproved, and you will be given approximate rates and costs.
You must submit an entire application once you’ve decided on your conditions. Depending on the circumstances of your firm, several types of evidence, including recent bank statements, may be necessary. A hard credit check will be done by LoanBuilder at this step, which could have a minor effect on your credit score. You must electronically sign a contract before getting your money if your loan application is accepted.
I Got A Loan From Loan Builder. Now What?
When your application is accepted, WebBank (the bank that originates LoanBuilder loans) will put the money into your bank account. The cash will typically transfer the following business day if your loan is accepted before 5 PM EDT on Monday through Friday. The transfer may take a bit longer if you are approved after 5 PM or on the weekend.
Loan Builder will automatically deduct money each week as repayment. The day of the week on which payments are withheld will be up to you to decide.
Loan Builder Declined My Loan. Now What?
If your loan is rejected, LoanBuilder will inform you right away and then send you an email a few days later with more information and explanations. After 30 days, applicants who weren’t accepted can try again.
Sales & Advertising Transparency
The amount of information that LoanBuilder gives potential borrowers up front has been drastically reduced during the last two years. You can still find some broad information on Loanbuilder’s operation in the FAQ, but you won’t find a lot of details like rates and specific terms. The same details are presented in a slightly different format on the PayPal Business Loan page.
Filling out a questionnaire will allow you to quickly check your eligibility, but you must provide contact information.
Customer Service & Techincal Support
Calls to customer support are accepted Monday through Saturday. Additionally, social media and email are available for support. However, there is no live chat option.
Loan Builder looks to have made tremendous efforts to improve its customer service experience even though consumers have in the past complained about how difficult it was to contact a customer care specialist. The majority of current reviews of the company’s customer experience are good.
Loan Builder Review, Complaints, & Testimonials
Negative Reviews & Complaints
It’s challenging to distinguish PayPal’s loan services from all of their other activities because they are a PayPal service. LoanBuilder was a Swift Capital creation before it was incorporated into PayPal. If you don’t want to read through countless PayPal complaints, Swift Capital’s Better Business Bureau profile is still where many concerns about LoanBuilder tend to go on the BBB website. Although Swift Capital is not BBB-accredited, it has an A+ rating on the website and 21 complaints that were resolved in the last three years. It also has a strong presence on Trustpilot, where it has 5,336 reviews and a 4.7/5 rating. Nevertheless, there are some unfavourable reviews online. Here is a list of grievances made over this service:
- Unforeseen Roadblocks: Some customers, either due to miscommunication or mishap, said the application and funding experience turned out to be more complicated than anticipated.
- Confusing Terms: Though sometimes due to unfamiliarity with short-term loan terminology, some customers found themselves unprepared to meet the terms.
- Short Repayment Terms: Repayment must take place in a maximum of 12 months. That’s not a long time. The weekly repayments will be much higher than they would be if you got a more extensive term length.
- Inflexible: Some complaints focused on the inflexibility of LoanBuilder’s terms when they ran into difficulty meeting the payment schedule.
- COVID-related Issues: Many of the more recent complaints involve difficulties repaying during the 2020-2021 global pandemic, as well as confusion surrounding PPP applications.
Positive Reviews & Testimonials
LoanBuilder has several testimonials on its website, a lot of positive reviews on Trustpilot, and a few positive experiences on the BBB. Customers usually like the following:
- Fast Time To Funding: Despite the costs of doing so, being able to get capital fast has its virtues.
- Helpful Customer Service: For the most part, customers appear to be satisfied with the service and support offered.
- Weekly Repayment Terms: Most MCA and short-term loan providers deduct a portion of your sales every day. For many businesses, weekly deductions are much easier to handle.
- Transparent Fees: Loan Builder has few surprises as far as fees go, which is somewhat rare for this type of product.
Compared to the typical fintech business loan, LoanBuilder’s loans are quick, simple, and a little more flexible. Although PayPal’s shift away from transparency over the past two years is perplexing and unquestionably a mistake, the service is still one of the best short-term loan options available.
Loan Builder has a lot to offer the right kind of business, even though some borrowers might prefer loans with longer repayment terms. In other words, Loan Builder is worth considering in your comparisons if your company requires a quick infusion of cash or you are unable to secure financing elsewhere.