Inside PayPal's Microlending Program Microloans can mean mega profits.

As the owner of Crisloid, a maker of high-end backgammon, checkers and cribbage sets, Jeff Caruso knows that if he buys more raw materials in late summer, he can make more money during the holidays. The problem is coming up with the extra cash. That's why he borrows from PayPal, which began issuing single, fixed-fee loans of $1,000 to $20,000 to qualifying customers in 2013 through its Working Capital program. (The cap was raised last year to $60,000.)

Caruso has taken three business loans through PayPal's microlending program, borrowing $10,000 to $15,000 a pop—$35,000 in all. He uses the money to meet his Providence, R.I.-based company's fourth-quarter spike in demand, which helped revenue exceed $500,000 last year for the first time.

"Come August, if I can take $12,000 and turn that into finished goods, it's all going to sell," Caruso says. "It helps us finish the year that much stronger."