PayPal to Offer Business Cash Advance Solution for Small Businesses

New Working Capital fund for PayPal business customers and eBay sellers announced to meet “enterprise funding gap”

PayPal has announced a new solution that will offer cash advances to the UK’s small and mid-sized businesses in order to help close the current funding gap. PayPal business customers, including eBay sellers, will be able to utilise the payment group’s Working Capital fund to access merchant cash advancements against future sales. Small businesses will be able to access funding quickly and without affecting their credit record.

PayPal will make decisions based on the companies PayPal sales history and then transfer finance in “minutes” with a single, fixed fee presented to the business before they sign up. PayPal’s Working Capital fund also allows businesses to pay back the advances through a percentage of their PayPal sales.

Working Capital will launch this autumn to selected companies in the UK and will become widely available in 2015. The fund follows a successful launch in the US, where the payment group has already provided $140m to small and mid-sized American businesses.

PayPal’s UK managing director, Cameron McLean, discussed why the new fund is necessary in the UK too:

“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. According to the British government, around a third of small businesses rely on retained earnings or the owner’s own finances rather than bank or equity funding.

“This means that many find it very difficult to finance their present needs or future growth. And the problem is acute for smaller, online businesses.”

For more information on business cash advancements, check out our sister company’s guide on the advantages and disadvantages of cash advancements.

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