Global online third party service provider PayPal announced it will be launching a new service that will provide working capital program for small business customers in the UK by offering firms cash advances against future sales.
The service will be initially open to select PayPal business customers (primarily existing eBay sellers) in the fall, but could be expanded in 2015. According to PayPal, the company will use a firm’s sales history and a quick online application form to make funding decision in minutes. Firms will then pay a single fixed fee and then repay the loan with a share of their future PayPal sales. By utilizing this model, it means that there are no minimum monthly payments.
“Small businesses are the lifeblood of the British economy. But seven years after the start of the credit crunch, many of them are still struggling to get funding,” said Cameron McLean, Director of PayPal UK. “PayPal is well placed to make a difference. We’ve been helping businesses thrive online for almost 15 years. And our close relationship with our business customers means, we can approve a cash advance and provide the money in minutes.”
P2P lending is a fast growing industry globally. In the UK, interest has been significant so it is not surprising that a company with the resources like PayPal would be interested in entering the market. Given PayPal’s reach and financial backing, the new capital program for small business customers in the UK could prove to be widely successful.
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