PayPal to launch Business Cash Advances for UK customers

Alternative funding option PayPal Working Capital will also be available to eBay sellers

PayPal has announced that it is to “help meet the small and medium enterprise funding gap” by offering its UK business customers, including eBay sellers, Business Cash advances against their future sales.

Launching on a trial basis this autumn with a wider roll-out expected in 2015, the cash advance scheme PayPal Working Capital will allow merchants to repay their advance with a share of their PayPal sales via card payments.

PayPal have made it clear that the advance is “not a loan” and that there will be no credit checks, interest charges or late payment fees, and the advance will not impact on the customer’s business or personal credit record.

Advances will be approved on the basis of the entrepreneur’s sales history through an online application and the e-commerce giant says that if the claim is successful it will provide the funds “in minutes”.

It intends to build on the scheme’s success in America which, since its launch last September, has facilitated over $140m in cash advances to US small and medium businesses to date.

PayPal UK managing director, Cameron McLean, commented:

“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 and medium-sized enterprises 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.

“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.”

To find out more about Business Cash Advances and its advantages and disadvantages, check out our Business Cash Advance guide.

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  1. It’s great that another major funder is entering the business cash advance space. Small businesses are the backbone of the UK economy and those business owners should be incredibly proud of their startup and growth aspirations. Throughout the collapse of the banking system potentially thousand of new business ideas were shelved through lack of high street funding. The great news is through the likes of Pay Pal adding to the list of funders is that businesses can shop and compare quotes from all the providers in the UK. We at Merchant Loan Advance are seeing an upsurge in the product awareness and it’s only positive feedback we are hearing.