PayPal Working Capital is a merchant cash advance linked directly to your PayPal account.
Update on PayPal Working Capital with eBay payments
Monday evening this week, PayPal emailed many sellers with an update as to how PayPal Working Capital with eBay payments will work (or more correctly won’t work).
Paying off existing PayPal Working Capital finance
There are a couple of interesting points in the email. Firstly, if you have a PayPal Working Capital advance and your off eBay volumes aren’t sufficient to meet your minimum payments you may need to make additional repayments via your PayPal Working Capital dashboard, directly from your bank account linked to your PayPal wallet, or from your PayPal balance.
Why can’t PayPal create a link to your eBay account(s)
A surprising point to note is that PayPal (like eBay’s new arrangement for finance with Asto) don’t have a solution to check your eBay sales. IWOCA had this when they launched in the UK and have always been quite happy to check your eBay sales volume and offer finance based on this. One can’t help wondering why, with a couple of year’s notice that eBay payments were coming, PayPal haven’t yet built a similar solution.
PayPal offer to help you migrate away from eBay
It’s very notable that PayPal are offering to help you migrate some or all of your business away from eBay and are willing to help you set up your own webstore to sell through… obviously with PayPal built in as a payment solution and thus with sales that can be taken into account for PayPal Working Capital.
The future of finance from PayPal for eBay sellers
Finally, PayPal say that they are working to make alternative financing available. Having built a world class small business finance solution it’s likely that they are viewing feedback from users on alternative solutions, thinking they can put a more attractive offer together, and will want to continue working with you. They’ve got a cracking product and just because PayPal Working Capital with eBay payments don’t sit well together doesn’t mean they won’t do everything they can to continue offering finance.
In a survey some PayPal Working Capital users were invited to complete they give an indication of what this might be with the question “If PayPal Working Capital was not available for my business in the future, once it has moved to eBay Managed Payments, I would be interested in alternative funding products from PayPal such as a business loan.”
More information on PayPal Working Capital with eBay payments
PayPal Working Capital email of 6th July 2020
“At PayPal, we believe you should be able to build your business your way, so we hope your PayPal Working Capital advance is helping you to do just that.
As a PayPal Working Capital customer who sells on eBay we wanted to make sure that you are aware of the changes to payment processing eBay are introducing and the impact it will probably have on your PayPal Working Capital advance.
What changes are eBay introducing?
eBay is launching its own payment processing service and plans to move all its business sellers to eBay Managed Payments over the coming months.
What does this mean for your business?
When your business moves to eBay Managed Payments, your eBay sales will no longer be visible to PayPal even when PayPal is included as a checkout option. PayPal will not be able to collect automatic repayments from your eBay sales, so you are likely to take longer to repay your cash advance and may not meet the minimum repayment required every 90 days.
What can you do?
If you are not able to make the expected level of repayments from sales still processed through PayPal, you should arrange to make additional repayments. One of the ways you can do this is by setting up bank payments from your bank using the new functionality in the PayPal Working Capital account dashboard.
Will your business still be able to apply for a PayPal Working Capital advance in the future?
Your business’s future eligibility will be calculated on your non-eBay sales so depending on the amount of sales you continue to process through PayPal, you may still be eligible for future funding from PayPal Working Capital.
We are working to make alternative financing solutions available, allowing us to continue to help your business letting you determine the best way to fund your business.
We value you as a customer and would like to continue to help and support you and your business. If you have sales in other channels or marketplaces or want to setup your own online store, then we can help you.
If you have any questions, visit our FAQs or call us on 0800 368 7176.”
– Yours sincerely, PayPal Working Capital
Waiting for funds from buyers from June to go into my account
After all these years as a Paypal member in good standing, Paypal will not trust a seller to make payments? If I still have a Paypal Advance Balance when I get switched over to Managed Payments, I will continue to pay back that loan with 15% of all of my Ebay sales as I promised to do when I took out the loan. I know Paypal can’t take the payments automatically, but as each deposit is made into my bank account, I will compute 15% of that payment and tender it to Paypal. Seems easy enough to me.