Small businesses often face challenges in securing traditional loans from banks, which is why many turn to alternative financing options like Revolut and PayPal Loans. Both companies offer business loans with flexible terms, quick approvals, and digital convenience. In this guide, we’ll compare Revolut and PayPal Loans to help you determine which option is best for your small business.
Overview of Revolut Business Loans
Revolut is a popular fintech company known for its banking services and international payment solutions. Recently, it has expanded into business loans, offering small businesses quick access to capital.
Key Features of Revolut Business Loans:
- Loan Amounts: Revolut offers business loans starting from £1,000 to £250,000 (or the equivalent in other currencies).
- Loan Terms: Revolut offers loan terms ranging from 3 to 12 months.
- Interest Rates: Interest rates vary depending on the loan amount, business profile, and other factors.
- Quick Approval: Businesses can apply for a loan through the Revolut app and receive funds within hours if approved.
- No Hidden Fees: Revolut claims to offer transparent pricing with no hidden fees.
Revolut’s business loans are available to businesses that use their Revolut Business account. The application process is entirely online, and users can manage their loan repayments directly from the app.
Overview of PayPal Loans
PayPal Loans (also known as PayPal Working Capital for some small businesses) provide short-term funding options based on a business’s PayPal sales history. This service is widely used by e-commerce businesses and merchants who already use PayPal for payment processing.
Key Features of PayPal Loans:
- Loan Amounts: PayPal Loans range from $5,000 to $500,000 for businesses that meet certain criteria.
- Loan Terms: Loan terms vary based on loan size, with repayments typically spread out over 9 to 24 months.
- Repayment Flexibility: Repayments are automatically deducted from a percentage of your PayPal sales, offering more flexibility for businesses with fluctuating income.
- No Credit Check: Approval for PayPal Working Capital loans is based on your PayPal sales history, not your credit score.
- Quick Access to Funds: Businesses can access funds within minutes of approval.
PayPal Loans are ideal for businesses with an existing PayPal account and a steady flow of PayPal transactions, as the loan amount and approval are based on your sales volume through the platform.
Comparing Revolut and PayPal Loans
1. Eligibility Requirements
- Revolut: You must have a Revolut Business account to apply for a loan. Revolut reviews your business profile, including financials and credit history, to determine eligibility.
- PayPal: To qualify for a PayPal Loan or PayPal Working Capital loan, you need an active PayPal account with a solid transaction history. PayPal doesn’t perform a credit check; instead, it evaluates your PayPal sales performance.
2. Loan Amounts
- Revolut: Loan amounts range from £1,000 to £250,000 (or currency equivalent). The loan size may be limited for new businesses with a short history.
- PayPal: Loan amounts range from $5,000 to $500,000, and are closely tied to your PayPal sales. Businesses with higher sales volumes can qualify for larger loans.
3. Approval Time
- Revolut: Approval and funding can take a few hours, making Revolut one of the faster options for businesses that need quick access to cash.
- PayPal: PayPal Loans are approved almost instantly, and funds can be available within minutes of approval, making it an even faster option for businesses with PayPal accounts.
4. Repayment Flexibility
- Revolut: Repayments are typically set on a monthly schedule, and the amount depends on your loan terms and interest rate.
- PayPal: PayPal offers more flexibility with its automatic deduction model, where repayments are taken as a percentage of your PayPal sales. This is particularly useful for businesses with seasonal or fluctuating revenue, as repayments adjust according to your sales volume.
5. Interest Rates
- Revolut: Interest rates vary based on your business profile, loan amount, and term length. However, Revolut is known for offering competitive rates.
- PayPal: PayPal charges a fixed fee instead of traditional interest. The fee amount depends on the loan size, the percentage of sales taken for repayment, and your PayPal account performance.
6. Loan Terms
- Revolut: Loan terms range from 3 to 12 months, offering short-term financing.
- PayPal: PayPal Loans have repayment terms between 9 and 24 months, depending on the loan amount and your PayPal sales performance.
Pros and Cons of Revolut Business Loans
Pros:
- Quick application and funding process.
- Flexible loan amounts for small businesses.
- Manage loans directly through the Revolut app.
- Transparent pricing with no hidden fees.
Cons:
- Only available to businesses with a Revolut Business account.
- Shorter loan terms (maximum 12 months).
Pros and Cons of PayPal Loans
Pros:
- No credit check required.
- Automatic repayment through PayPal sales.
- Instant access to funds upon approval.
- Suitable for businesses with fluctuating revenue.
Cons:
- Only available to businesses with a PayPal account and sufficient sales history.
- Loan amounts are tied to PayPal sales, so businesses with lower transaction volumes may not qualify for larger loans.
Conclusion
When comparing Revolut and PayPal Loans, the best option for your business depends on your specific needs and how you process payments.
- Revolut is a great option for businesses that need fast access to funds and are looking for a simple loan application process. If you already use Revolut for your business banking, it’s a convenient solution with competitive rates.
- PayPal Loans, on the other hand, are ideal for e-commerce businesses or merchants who process a significant volume of sales through PayPal. The flexibility of automatic repayment based on your sales volume makes it a strong choice for businesses with fluctuating revenue.
Ultimately, both platforms offer valuable alternatives to traditional business loans, with the main difference being the type of business you run and your preferred payment platform.
If you have any questions feel free to comment down below. We are always here to guide you!
FAQs
What is the main difference between Revolut and PayPal Loans?
Revolut requires a business account and offers loans based on your business profile, while PayPal loans are tied to your PayPal sales history and repayment is based on a percentage of those sales.
Can I get a loan from Revolut if I don’t have a business account?
No, you must have a Revolut Business account to apply for a loan through Revolut.
How are PayPal Loan repayments structured?
PayPal Loan repayments are automatically deducted as a percentage of your PayPal sales, which provides flexibility for businesses with fluctuating income.
Does PayPal require a credit check for loans?
No, PayPal Loans are based on your PayPal sales history, and there is no credit check involved in the approval process.
How fast can I get a loan from Revolut or PayPal?
Revolut typically approves loans within a few hours, while PayPal offers almost instant approval with funds available within minutes.
What are the loan amounts offered by Revolut and PayPal?
Revolut offers loans ranging from £1,000 to £250,000, while PayPal offers loans from $5,000 to $500,000, depending on your PayPal sales history.
