PayPal branches into UK SME lending

PayPal branches into UK SME lending

The digital payment revolution has revealed it will be launching into the UK's SME sector with PayPal Working Capital….

The digital payment revolution has revealed it will be launching into the SME sector with PayPal Working Capital.

PayPal has confirmed they will be launching Working Capital in the UK in order to help British businesses fund their future growth.

For the first time in Britain, PayPal business customers, including eBay sellers, will have access to a merchant cash advance against its future sales.

It is said that the launch will meet a real need at a time when the UK’s Department of Business, Innovation & Skills (BIS) reports that “SMEs […] suffer from long-standing challenges in accessing bank and equity finance.”

Commenting on the launch, Cameron McLean, Managing Director 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.

“According to the British government, around a third of SMEs 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.”

Cameron added: “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.  PayPal Working Capital has been a big hit with business owners in the United States, and we’re delighted that our UK customers will be next to benefit from faster, fairer funding.”

Paypal announced that it will start offering cash advances to selected PayPal customers this August, where the launch will offer major advantages compared with traditional ways of funding a business.

The advantages include:

Funding in minutes

Advances can be approved based on a firm’s PayPal sales history. This means the customer completes a quick online application – there’s no need to spend hours gathering information about their business. And PayPal can make a decision and provide the funds in minutes.

Pay when you get paid

Unlike traditional bank loans, PayPal Working Capital allows a business to repay the advance with a share of their PayPal sales. If they have a day without any PayPal sales that’s fine – they don’t repay anything that day. 

No credit check

Since the US launch in September, via lender WebBank the PayPal Working Capital programme has provided $140 million in loans to SMEs and according to The PayPal Working Capital Customer Satisfaction Survey conducted in June, 2014.



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