When should you stop using PayPal Working Capital?

The time will come when eBay will switch to eBay Managed Payments and your eBay derivative income will stop going through your PayPal account. It will be deposited into your eBay account and sent directly to your bank account. This will put you at odds with the terms of any PayPal Working Capital loan you have, which could result in requests for immediate full payment of the outstanding balance.

What behaviors are not permitted for PayPal Working Capital customers?

PayPal will monitor participating accounts for unexpected drops in PayPal volume and certain other types of behavior. PayPal may terminate your contract and the unpaid balance may become due immediately in certain circumstances, including if you:

  • No longer accept PayPal as a method of payment; or
  • Deliberately move payment volume away from PayPal as a payment method for your business’s sales.

– PayPal Working Capital FAQ

With that in mind, when should you consider a PayPal Working Capital loan? Well if you’re in the UK you know for sure that eBay Payments will be implemented between July 2020 (the earliest date eBay can roll out eBay Managed Payments in the UK) and the end of 2021 ( the time frame indicated by eBay the global rollout will be completed).

If you are in the United States, eBay managed payments could arrive faster, and of course 6,000 sellers have already voluntarily signed up. For Germany, we expect to see voluntary trials on eBay managed payments by the end of this year. If you are located in one of these two countries (or if your eBay account is registered in the United States or Germany), it is likely that eBay will mandate the use of eBay Managed Payments much closer to July 2020 than end of 2021.

While eBay will migrate away from PayPal and require the use of eBay’s managed payments is almost a year away for most sellers, perhaps up to 18 months, loan periods can be relatively long, especially if you opt for a relatively low refund. percentage (say 10% of sales).

Currently, if you take out a PayPal Working Capital loan today, it’s almost inconceivable that it won’t be repaid by July of next year. However, if you decide that you need to access funds in a few months, say, in the middle of your Christmas sales, chances are there is still an outstanding balance next July.

PayPal working capital loans are suitable for many online sellers because there is a one-time fee added to the loan, but without interest, prepayment charges or other fees. A percentage of the sales you agree to up front is used to pay off the loans, so if your income goes up your loan is paid off faster and if the sales go down you’ll pay less.

There are of course other alternative providers and some can be found in the finance section of the Tamebay Guide. While many aren’t in the market for a loan today, check out alternatives to PayPal Working Capital and get pre-approved today if you consider that you may want a loan later in the day. year.

Modified to add

We have received the following statement from PayPal:

“PayPal values ​​your business and we understand the potential impact of eBay managed payments on our customers.

While the switch to managed payments from eBay will lead to changes, we don’t see this as a reason not to continue using PayPal Working Capital. This move will change the way customers interact with PayPal – for example, PayPal will not be able to accept automatic refunds from eBay sales. However, businesses will still have the option of making manual refunds to meet their minimum refund requirement. We’re also introducing improvements that will make this easier to track and track as part of our larger efforts to help customers adjust, and since PayPal Working Capital is a cash advance, changes to your refunds don’t. will have no influence on your business or your credit rating.

If you choose to sign up for eBay Managed Payments when it becomes available in the UK, please contact PayPal Working Capital Merchant Assistance as soon as possible on 0800 368 7102 (Monday to Friday 8:00 a.m. to 6:30 p.m.) to discuss your current cash flow. by PayPal Working Capital. ahead of time and what are your options. Our goal is to support traders throughout the process with workable solutions that are both for you and for us. We are proactively working to develop the right strategies to help, including developing alternative financing solutions to support our merchants affected by the shift to eBay managed payments. We look forward to announcing further developments in this area in the near future.
– Pay Pal

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