PayPal is to start advancing cash to small businesses in the UK, the online payments firm has announced.
The loans will be made against future sales, with e-Bay-owned PayPal recouping its capital layout by taking a slice of the company’s revenue generated through PayPal services.
The PayPal Working Capital programme is designed as an alternative to traditional bank loans and other lending services.
The scheme has been running in the US since last September – where it has lent $140 million so far – and will be rolled out in the UK later this year.
Small firms can receive “funding in minutes” after completing an online application from, which accesses the company’s sales history with PayPal.
Users are subject to a single fixed fee, and then repay the loan with a share of their PayPal sales, meaning that there are no minimum monthly payments.
Cameron McLean, MD of PayPal UK, said: “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.
“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.”
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