PayPal’s Merchant Lending Tools Top $30 Billion in Originations

PayPal said Wednesday (March 26) that it has passed $30 billion in global loan originations for small businesses since launching its first merchant lending solution in 2013.

Over that time, the company has extended more than 1.4 million loans to more than 420,000 business accounts globally, the company said in a Wednesday press release emailed to PYMNTS.

PayPal’s merchant lending solutions — PayPal Business Loan and PayPal Working Capital — are designed to help small businesses overcome the challenges they often face in accessing capital, Michelle Gill, executive vice president and general manager of SMB and financial services at PayPal, said in the release.

The company’s financing solutions have a streamlined online application process and are funded within minutes, Gill added.

“We launched PayPal Working Capital and PayPal Business Loan to serve this important need, and to provide a quick and responsible way to inject much needed capital to help fuel small business growth,” Gill said.

PayPal Working Capital was launched in 2013 and is available in the U.S., the U.K., Germany, France, Australia and the Netherlands, according to the release. It is repaid as a percentage of the borrower’s PayPal sales.

PayPal Business Loan, launched in 2017 and available in the U.S., offers term loans with fixed repayments, per the release. This offering is available to businesses, whether they use PayPal to process payments or not.

Both offerings are renewed or accessed again by more than 90% of customers, the release said.

Embedded lending solutions like those offered by PayPal have grown increasingly popular as small- to medium-sized businesses (SMBs) seek an onramp to accessing funding that can help them meet unplanned expenses or grow their businesses, PYMNTS reported in November.

Thirty-seven percent of SMBs are highly interested in switching to providers that offer embedded lending options, according to the PYMNTS Intelligence report commissioned by Visa, “Embedded Lending: From the Lender’s Perspective.”

It was reported in December that small business loans decreased in 2023 as lending standards tightened. According to three federal agencies with responsibilities for the Community Reinvestment Act (CRA), the number of small business loans originated decreased by 5.1%, and the number of small farm loans originated decreased by 5.6%.