PayPal‘s lending service, PayPal Working Capital, has revealed that it has now lent £625 million to small businesses in the UK. That’s up from £400 million in July last year. They report that 30,000 UK businesses have now benefited from the £3.6 billion that PayPal Working Capital has loaned globally since its inception in 2014.
Notably 70% of PayPal Working Capital loans made in the past year happened outside traditional bank branch hours. the process is entirely online and available at all times.
Many British small businesses are still struggling to get funding for their future development. The banks will always play an important role in business financing, but we’ve found that over 70 per cent of PayPal Working Capital funding was issued outside traditional UK bank opening hours. We’ve replaced the lengthy in-branch application process for traditional business finance with a fast, online alternative for PayPal’s small business customers. As PayPal knows the applicant’s business, we typically approve and issue a cash advance in minutes. The business owner can spend the time saved on what really matters: running their business.
– Norah Coelho, Director of Business Financing, PayPal UK
There’s no doubt that the traditional banks are still not doing what they should to support British small business and online services such as PayPal Working Capital have stepped into the gap. It’s also, from what we hear, more acute a problem for ecommerce merchants because the understanding gap about online retail is bigger.
PayPal and the others have the advantage in that they can take into account past performance and monitor online sales to make a judgement on what is appropriate to lend.
By all accounts, applying for a loan is extraordinarily easy and the funds are indeed available almost immediately and that can be a huge boost to merchant cashflow, especially at times when you need to buy stock or equipment to boost your performance.