[rcar]

The most details of these products out there is at https://www.paypal.com/us/webapps/workingcapital/tour under the Pricing tab. As a merchant, you agree ahead of time to a loan amount and a withholding rate, and depending on those parameters and your sales volume, you're given a fixed fee that is tacked onto the loan principal. Repayment then occurs by the lender withholding some amount of the payments that you receive until the principal + fixed fee gets paid back.

As a one-time/infrequent shot, it's actually a really nice lending product in that it's not going to cause undue strain on your business if your sales start to flag since the payments go down along with it (and because the total interest you pay is fixed, the implied APR is actually better that way). Where they can become problematic is when a merchant keeps rolling one after another of these since then you're paying a high price for credit and would be better off with a small business credit card or line of credit.

Definitely would like to see more transparency with these either way though. When used properly, both the lender and the borrower win, and so I find it odd that lenders try to obscure the details.