The repayment structure of a PayPal working capital loan is a lot like a merchant cash advance (the difference being that PayPal doesn’t purchase the right to your future receivables). A merchant cash advance is a lump-sum payment that a merchant cash advance company makes to a business, and they charge a fee. The business pays back the advance and fee with a fixed percentage of their daily credit and debit card sales.
Aside from the fact that PayPal is not purchasing your receivables, the other major difference between PayPal Working Capital and merchant cash advances is cost. PayPal is typically far less expensive than a traditional merchant cash advance, particularly if you choose a high repayment percentage.