PayPal’s small business finance programme has now provided more than £400 million in cash advances to help UK businesses to grow, according to its latest figures.
Since the online payments provider launched its Working Capital service in 2014, more than 22,000 business owners across a range of sectors have secured funding.
There has been a 116 per cent increase in cash advances in the last year, PayPal said.
“PayPal made its name pioneering e-commerce, making it possible for businesses to grow their sales and reach millions more customers online,” said Mark Brant, managing director at PayPal UK, commenting on the new figures.
“In the years that followed the credit crunch, we saw the impact it was having on our small business customers, many of whom were struggling. We saw an opportunity for us to help and set about making PayPal Working Capital a reality.”
Many small businesses have had trouble getting funding since the financial crash, with estimates of the current funding gap ranging from £6 billion to £39 billion.
The issue has been worsened by bank closures – PayPal says a third of SMEs it has helped are from areas that have lost 50 or more branches over the last four years.
“Technology companies like PayPal are finding new ways to serve customers where the products and services of the past are coming up short,” Brant said.
“Of course, banks will continue to play a pivotal role in small business funding, but we need to collaborate more to make financial services work better for small businesses.
“They’re the lynchpin of the British economy. With uncertain times ahead, it’s even more important we innovate and equip small businesses with the tools they need to succeed.”
Businesses can use PayPal Working Capital to receive a cash advance of up to £100,000 on their future sales. The funding can be approved within minutes and repaid as a percentage of the company’s PayPal takings without interest charges or late payment fees.