LoanBuilder Review 2020 | How Does The PayPal Loan work?

Does your company require some extra funding to meet a specific business goal? Maybe you need some cash to cover a new purchase order, or maybe you need to engage in some consultancy services? Either way, you’ll likely need to consider a business loan.

As such, it might be worth checking out LoanBuilder. The PayPal-owned lender offers short-term business loans of up to $500,000. While the platform won’t accept all applications, its eligibility threshold is somewhat lower than other business loan providers in the industry.

If you are thinking about using LoanBuilder for your business loan needs, be sure to check out our in-depth review. We’ve covered all the fine points – such as how much it costs, how much you can borrow, whether you are eligible, and more.

What is LoanBuilder?

LoanBuilder is an online financing platform that facilitates loans for US businesses. Owned by global payment service PayPal, businesses of all sizes can apply for a loan of just $5,000, all the way up to $500,000. However, it is important to note that LoanBuilder is not a lender per-say. On the contrary, the platform has its loans financed by US institution WebBank.

When you go through the loan application process, LoanBuilder will look at the performance of your company, as well as your individual credit profile. Regarding the latter, this requires a minimum FICO credit score of 550. The former demands a minimum business turnover of $40,000 and a trading history of 9 months or more. As such, these eligibility requirements are relatively low.

In terms of the specifics, LoanBuilder offers loan terms from 13 weeks, up to a maximum of 1 year. As such, funding is best obtained for a specific business purpose, such as funding a purchase order. If you instead require a line of business credit to help with working capital, you’ll need to use another business loan provider.

Comparing Loanbuilder to equally popular short term online loan providers

LoanBuilder is an online financing platform that specializes in offering short-term business loans. LoanBuilder is nonetheless not your typical lender as most of its loans aren’t just funded by WebBank, but also due to the fact that the lender is biased towards businesses that support PayPal funded transactions. How does it compare to such other short term loan providers as Advance America, CashNet USA, and Ace Cash Express? We have summed up their key features in the table below:

How Does LoanBuilder Work?

If you’ve used a business loan provider before – such as Lendio, CashUSA, or LendingClub – then you should know that the financing process at LoanBuilder is completely different. The main reason for this is that LoanBuilder offers short-term business loans that cannot exceed a term of 1 year. Moreover, rather than charging a conventional APR rate, LoanBuilder will simply charge you a fixed funding fee.

Nevertheless, if this sounds like something that your business would benefit from, we’ve broken down the LoanBuilder application process in more detail below.

Step 1: Start the online application process

You will initially need to visit the LoanBuilder homepage and then click on ‘Check Eligibility’.

Step 2: Enter your personal information

Before exploring your business credentials, LoanBuilder will first need some information about your identity. This will include your full name, home address, date of birth, and telephone number. You’ll also need to input your social security number.

Step 3: Enter your business information

Next, you’ll now need to provide LoanBuilder with some important information about your business. The main points of consideration is the year the business was established, the amount of turnover your business generates, and the industry that you operate in.

Step 4: Review your loan terms

As is the case with any online lending platform, the automated system will now work its magic. Once LoanBuilder has made a decision on your application, you will be instantly notified on-screen. If your business does qualify for funding, then your loan terms will be stated outlined.

This will include the following:

✔️ The maximum amount you can borrow

✔️ What fixed fee you will pay on the loan

✔️ How much you need to repay each week

✔️ What documentation you need to supply

If you are happy with the loan terms offered to you, LoanBuilder will not send you a digital loan agreement until you provide them with the supporting documentation they ask for.

Step 5: Upload documents and sign loan agreement

You will likely be asked to upload documents supporting the information you provided in your application. Notably, this will include your recent business checking account statements, tax statements, and potentially – the most recent set of company accounts you filed.

Once you have uploaded the required documents and LoanBuilder verifies them, the final stage of the application will require you to sign a digital loan agreement. If everything goes to plan and LoanBuilder approves your application before 5pm (EST), then you should receive your funds the next working day.

How Much Does LoanBuilder Cost?

Unlike other business loan providers operating in the industry, LoanBuilder charges a fixed fee, as opposed to an APR rate. We like this, as it makes the financing agreement easier to understand. In a nutshell, the one-time fee charged by LoanBuilder can range from just 2.9%, all the way up to 18.72%. As such, there is a huge disparity on what your business could end up paying.

For example, if you were able to get the lowest rate of 2.9%, and you borrowed $10,000, then you would only end up paying $290 in fees. At the other end of the fee spectrum, the highest rate of 18.72% for the same $10,000 loan would cost $1,871!

Putting the actual fee to one side momentarily, the best thing about LoanBuilder is that the length of the term will not impact the amount of interest you pay. In other words, if your fixed interest fee amounts to $200, irrespective of whether you agree to repay it in 3, 6, or 9 months, the fee will always be $200.

Am I Eligible for a LoanBuilder business loan?

As we noted earlier in our review, although you will need to meet some eligibility requirements, the threshold is a lot lower at LoanBuilder in comparison to other loan providers. As an added bonus, LoanBuilder is available throughout the US, so there are no state restrictions.

Nevertheless, we have listed the main eligibility requirements below. Make sure that you meet them before making an application.

✔️ Your FICO credit score

LoanBuilder will look at the FICO credit score of the main applicant. If that is you, then you will need to ensure that you have a minimum score of 550. Anything less and you will be rejected.

✔️ Minimum turnover

Your company must have a minimum turnover of $40,000. This is slightly lower than fellow industry counterpart Kabbage, which asks for an annual turnover of $50,000.

✔️ Established date

Unlike Kabbage – which asks that your business has been established for at least 1 year, the team at LoanBuilder have lowered this to 9 months.

✔️ Eligible industry

In a somewhat unusual move, LoanBuilder will only grant you a business loan if your company operates in an eligible industry. Although you will need to check whether or not your company operates in an eligible industry before applying, prohibited industries include the gambling, finance, law, political, and debt collection arenas.

Receiving your business loan

Once your loan application is approved, you should receive your loan funds the very next day. This will be transferred directly into your checking account.

Repaying your business loan

First and foremost, you will be required to make weekly payments, as opposed to the standard monthly repayment plan typically found within the business loan space. As such, it is crucial that you ensure you always make your repayments on time. This shouldn’t be an issue per-say, as you will be required to set up an electronic debit agreement. This means that the funds will be taken out of your business account on the same day every week.

However, it is important to note that should you fall behind on your business loan, you will personally be liable. This means that the company can look at your personal assets when attempting to recover what you owe. Nevertheless, the good news is that LoanBuilder gives you the option of decreasing the amount you pay each, subsequently increasing the duration of your loan term. This could come in handy if your business is having issues with cash flow.

Customer Service at LoanBuilder

LoanBuilder has successfully gone through the well-renowned J.D. Power Certified Contact Center Program. This means that the platform is certified as offering excellent customer service. If you do need to speak with a member of staff at LoanBuilder, you can contact them on the following channels.

📱Phone: 1-800-347-5626

📧 Email: customerservice@loanbuilder.com

✍️ In Writing: Swift Financial, LLC 3505 Silverside Rd. Wilmington, DE 19810

If you do want to speak with LoanBuilder over the telephone, you will need to call them during the following opening hours.

⏲️ Monday to Friday: 09:00 – 20:00 (EST)

⏲️ Saturday: 11:00 – 15:00 (EST)

⏲️ Sunday: Closed

LoanBuilder Review: The Verdict

In summary, LoanBuilder stands out for us for a number of reasons. Firstly, the amount of financing on offer is vast – covering small business loans of just $5,000, all the way up to a staggering $500,000. While the amount you are offered will depend on your financial circumstances, we like the range on offer.

Secondly – although unconventional, we think the team at LoanBuilder have executed a good move with their fixed fee pricing plan. While business loans usually come with an annual APR rate, LoanBuilder simply charges a one-off rate – regardless of how long you borrow the funds for.

Finally, it is also notable that the eligibility requirements set out by LoanBuilder are much lower in comparison to other business loan providers. For example, you only need to be in possession of a personal FICO score of 550, and your business only needs to be turning over $40,000 per year. Adding in the fact that your initial application will not impact your credit score, it’s thumbs up on LoanBuilder all-round.

Glossary Of Loaning Terms

FAQ: