PayPal announced on Tuesday the launch of Working Capital, a new loan program for small businesses.

With WebBank, PayPal aims to provide inexpensive and simple loans to businesses processing payments through its service.

As of yesterday, about 90,000 merchants, ranging in size from $20,000 to several million in annual sales, can obtain these interest-free loans for a one-time flat fee. Qualifying businesses can take out up to 8 percent of their annual PayPal sales.

PayPal's program is notable for all the features it lacks. Beyond an initial flat fee, no additional fees, credit checks, due dates, interest charges, early payment penalties, or minimum monthly payments will apply. There is only the one-time flat fee, which varies by business and loan.

This fee, determined by PayPal, considers businesses' sales histories, loan amounts, and their daily repayment deduction percentage. The sample fee schedule on PayPal's site notes the flat fee on an $8,000 loan for a business making $100,000 in annual PayPal sales would range from $281 to $947 or roughly 3.5 to 12 percent. 

To repay their loans, businesses can set a percentage to be deducted from each of their sales on PayPal. Companies who don't do business in a given day or week won't process a payment. The near-instant access to capital and no repayment timeframe is good for small business. For PayPal, the obvious benefit is that companies must continue using its service and cannot direct payments away from PayPal until the loan is repaid. 

The initial stage of the program will run through December. However, Darrell Esch, vice president and general manager of small business lending at PayPal, says there may be some changes in January. "This is the first entry into the space in the U.S. and so like anything we should expect that these will evolve over time," he says. "We're going to do enough of these to get enough learning, to get enough market reaction, to figure out how to make the program even better."