Microloans within PayPal's financing initiative offer potential for substantial earnings.
Crisloid Boosts Production Ahead of Holiday Season with PayPal Loans
Jeff Caruso, the owner of Crisloid, a company that manufactures high-end backgammon, checkers, and cribbage sets, is set to increase production this August using funds from three business loans totaling $35,000 obtained through PayPal's microlending program.
The production increase is likely in response to anticipated holiday demand, and Caruso plans to use $12,000 of the loaned amount to produce finished goods that will be sold in August. The success of this production increase is expected to strengthen Crisloid's year-end financial position and contribute to its revenue for the current year.
PayPal began issuing single, fixed-fee loans of $1,000 to $20,000 in 2013, with the cap raised to $60,000 last year. These loans are designed for small businesses to finance their operations and meet increased demand during specific periods.
The terms and conditions of PayPal’s Working Capital program for small business loans include eligibility for businesses using PayPal for payment processing with a PayPal Business account and typically at least 3 to 12 months of sales history on PayPal. The loan amount can be up to 35% of the business’s annual PayPal sales, with a maximum of $150,000 for the first loan. A fixed percentage of daily PayPal sales, usually between 10% and 30%, is automatically deducted until the loan is fully repaid within the 18-month term.
The additional funds for production are not specified as coming from a PayPal loan, but Caruso has used loans from PayPal's Working Capital program to finance previous purchases. These loans helped Crisloid's revenue exceed $500,000 for the first time last year.
It is worth noting that the production increase does not seem to be related to a specific fourth-quarter spike in demand mentioned earlier. Caruso buys more raw materials in late summer to increase production during the holidays, which may contribute to the observed demand spike.
In summary, Crisloid is preparing for the holiday season by increasing production, with the help of PayPal loans. The flexible repayment terms of these loans allow businesses like Crisloid to manage their cash flow effectively, ensuring they can meet increased demand during specific periods while maintaining a strong financial position.
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