It's not annual, it's one time. Your interest rate may not be 6%, though. But it won't be 20 - 30%. My last one was also 6%, so I think that is the rate, but I'm not 100% sure.
There are some basic eligibility requirements too:
Have a PayPal Business or Premier account for 3 months or more
Process between $20,000 and $20 million in annual PayPal sales if you have a Premier PayPal account or between $15,000 and $20 million in annual PayPal sales if you have a Business PayPal account
Pay off any existing PayPal Working Capital loan
So, yes, you could borrow $1,000 from PayPal and only pay $60. And there is no term, so it could last however long you need to repay it. There only requirement is you pay back a required percentage amount per quarter. It's easy to meet (I've never come close to not meeting it so I've never paid attention).
But the percentage pay back is this: 5% minimum per quarter for loans estimated to take 12 months or more to be repaid. A 10% minimum applies to loans estimated to be repaid within 12 months. Like I said, if you had the sales to qualify for the loan in the first place, it should be easy to do.
But I've taken out a $10,000 loan before. Basically, with no credit check or anything, you go to the PayPal Working Capital website and get a quote. They will give several options for amounts you can take out a loan for and the pay back rate (you can also customize this if you like and it will give you the pay back rate based on what you ask to be loaned).
They determine these numbers by your overall sales and also history seems to have something to do with it. If you've done a PayPal loan before and paid it off, they seem to be willing to offer you better deals and more money.
I'm on my 5th working capital loan. The last one they offered me up to $65,000 at a 30% I think. I didn't take that much, obviously, but I don't think my sales quite justify that.
Here's an example of what the quotes they may give you could look like
$1,000 at 10%
$2,000 at 15%
$3,000 at 20%
$4,000 at 25%
$5,000 at 30%
Your numbers could look totally different, but this is an example. Now, those percentages are NOT your interest rate. Your interest rate would be like the 6% we discussed earlier. Those percentages are your PAYBACK rate.
For example: if you got a $1,000 loan at 6% interest you would owe $1,060. If you picked a 10% pay back rate PayPal would take 10% off the top from every sale you make and put it towards paying off the loan until it is paid off. This is done immediately and automatically and usually starts about 3 days after you receive your funds after accepting the loan.
If you do take the loan out, by the way, they will send you the money INSTANTLY. Like within a minute. It's crazy how fast the process really is...
I was at an auction when I took out that $10,000 loan. I had a $2,000 budget but realized I had the chance to hit a home run so right then and there I took out that loan and BOOM $10,000 was in my account.
Another thing is that if you need big cash fast and still have a loan and you can afford to pay it off, you can and take out another one right after. I've had situations where I needed funds for a big inventory purchase and had like...$700 left on my loan, so I just paid that off and took out a fresh loan. It does take like 2 - 3 days for the loan to officially be marked as paid off after that last payment, however.
Oh and if you have a friend who sales on eBay and uses it that can be awesome if they have the ability to take out a fresh loan or vice versa. My friend and I both were going to this auction last year and I needed about 5k but had about $1,700 left on my last loan. He had just paid is off and was going to take out a fresh one. So I asked him to take out 7k instead of 5k and then to send me $1,700 so I could pay off my loan. A few days later, after my loan officially was marked paid, I took out a fresh loan and sent him the money he paid me back from that.
