PayPal moves into small business lending in the US

PayPal, a subsidiary of Ebay, has launched a lending service in the US aimed at small businesses called PayPal Working Capital.

PayPal, a subsidiary of Ebay, has launched a lending service in the US aimed at small businesses called PayPal Working Capital.

The online payments giant claims that applicants can get approved and the money issued by lender WebBank, "in minutes".

Until December 2013 the service will only be available to the 90,000 US businesses already using PayPal to process their payments and the loan amount is capped at $20,000.

PayPal expects to launch a larger version of the service in 2014.

The loan is repaid from the businesses takings, with the company choosing what percentage of their revenue will go straight to PayPal until the loan is fully repaid.

According to PayPal there is a single flat fee attached to the loan and no periodic interest.

 

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