PayPal is set to start lending to small businesses this autumn with the launch of PayPal Working Capital, the payments firm will announce today.
The scheme offers PayPal’s business customers the ability to take a cash advance against their future sales for a one-off fee, rather than a traditional business loan with interest.
The UK launch comes 10 months after PayPal rolled out Working Capital for its US customers, and PayPal says it has already provided more than $140m (£82m) to US firms.
“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,” said PayPal UK managing director Cameron McLean. “This means that many find it very difficult to finance their present needs or future growth.”