United Kapital: The impact of PayPal funding

United Kapital: The impact of PayPal funding



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The introduction of PayPal's working capital program in support of online business communities that work through ebay is a welcome entrant to the alternative lending community.

The introduction of PayPal’s working capital program in support of online business communities that work through ebay is a welcome entrant to the alternative lending community.  


Alternative lenders are supporting small businesses that struggle to obtain much needed working capital from traditional bank sources. Over the last few years, the alternative lending community has thrived in filling the gap left by the financial crisis of 2008. 

However, too many alternative lending choices can potentially lead to information overload or uncertainty. This may slightly cloud the process of choosing, not necessarily ‘which one is best’ but more "which one is best for me and my business" in the eyes and minds of SME business owners. 

It is the responsibility of Alternative Lenders to be clear and precise in their communication to potential customers and finance users and be mindful of their obligation to responsible lending practices. This comes as part of fully understanding the commercial needs of SME Business who may look to them for help.

The only real drawback is that professional eBay sellers or PayPal reliant ecommerce business will become more indebted to PayPal, not just for using their payment services but then being tied in to paying off their debt to them. Sometimes putting all your eggs in one basket kills off your freedom of choice if your business needs the flexibility.

Alternative lending products such as invoice factoring, peer to peer, Merchant Cash Advances and small business loans have given SME’s more choice and scope to obtain essential business finance that is more suitable to their particular business model.

As an example, United Kapital’s Merchant Cash Advance is an innovative alternative lending source based on a business’ credit and debit card sales revenues, which are used as a factoring agent to obtain an advance on future credit and debit card payments. This form of alternative finance is suited to retail, leisure and hospitality industries. Other small business loan providers which give quick access to SME’s such as small business lender ‘Capiota’ utilise technology and proprietary systems, which provide funds to businesses within days rather than weeks or months. 

Small businesses are now more able to obtain funds whether they are online retailers or a traditional bricks and mortar business through alternative lending sources.

United Kapital has seen a rise of over 70 per cent year on year growth as the acceptance and use of the alternative lending market has increased. 

Attributed to Tony Pegg, Managing Director at United Kapital.
 

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