Today we are talking about something I have personal experience with and personal regret about: payment processor loans. Square loans, PayPal Working Capital, Shopify Capital, Stripe Capital, whatever version your payment processor offers, these products have become incredibly common for small business owners. I understand why because I’ve used them for my business. I want to be upfront: this is not going to be an episode where I tell you these loans are evil and you should never touch them. That’s not the full truth, and I don’t do half-truths on this show. There are situations where these loans can make sense. However, there are also situations where they quietly drain your cash flow, make budgeting harder, and leave you wondering how something that felt like a lifeline turned into a weight around your neck. I’ve been in both situations. In this episode, I’m breaking down how payment processor loans and merchant cash advances actually work, what they cost you in real terms, and why the way they are marketed can make them feel much simpler than they really are. We’ll talk about factor rates, daily holdbacks, and the difference between a flat fee and a true interest rate. I’m also sharing the real numbers from my own $30,000 Square loan for Salt and Charm: what I borrowed, what I paid back, how much came out of my sales every month, and what that same money may have cost through a more traditional loan option. Seeing the numbers laid out clearly was eye-opening. We’ll also talk about when these loans might make sense, when they absolutely do not, and why taking a second advance to manage the first one is a major red flag. If you’ve ever clicked into one of those offers sitting in your dashboard and thought, “That would be easy,” this episode is for you. The biggest takeaway is this: payment processor loans are not inherently bad. They are a tool. Before you accept one, you need to understand the real cost, the repayment structure, and how it is going to feel when money is coming out of your account every single day. Sometimes convenience is worth the price. But sometimes that price is thousands of dollars more than you needed to pay. Listen in if you have ever considered a Square, PayPal, Shopify, or Stripe funding offer, or if you are trying to figure out the smartest way to access capital for your business without creating more cash flow stress. Business From Scratch with Abbye McGee is for people who are building a business while rebuilding their life. Abbye, a single mom and three-time founder, shares clear and honest talk about the real work behind mindset, money, identity, and daily life when you start from zero. The show gives you steady guidance, simple steps you can use right away, and real conversations with founders, creatives, and friends who built their own way. Each week helps you focus, test ideas, and keep moving even when the process feels messy.
