PayPal has today announced the launch of Working Capital, a new loan product created to provide small-to-medium-sized business (SMBs) with access to funds via their PayPal accounts.
The international e-commerce business chose Australia as one of the first countries after the United States to receive Working Capital, a product that PayPal Director of Customer Experience and Solutions Kareem Al-Bassam says will offer SMBs a wider choice of financing options.
“Working Capital is ideal for small-to-medium-sized business owners who need fast, simple and flexible solutions to fund activities, like staffing up ahead of seasonal demand or buying additional inventory to meet orders,” says Al-Bassam.
“We’re using data and technology to provide a tailored credit solution that meets the needs of small businesses today. The capital is granted to eligible PayPal merchants in minutes, and merchants only make repayments when they get paid.”
Working Capital is available for PayPal business customers who have had an account with the company for at least one year. Provided applicants are approved, loans of up to 8 per cent of the applicant’s annual PayPal sales can be deposited into their PayPal account within minutes of applying.
Loan fees are determined by loan amount, repayment percentage, and PayPal sales history. Repayments are then deducted from PayPal sales, the percentage of which can be chosen by merchants.
PayPal’s loan product features no penalty fees. According to PayPal’s Working Capital, the product “charges a single, fixed fee that you’ll know before you sign up. No periodic interest, no hidden fees, no set payment plan, no payment due dates, and no late fees.”
“PayPal’s investment in Working Capital is another demonstration of our commitment to support and encourage Australian SMBs, which make such an essential contribution to the Australian economy, by providing them with innovative solutions and technology to expand their businesses,” says Al-Bassam.
PayPal Working Capital will be introduced to a limited number of PayPal merchant partners between now and the end of the year, followed by a broader roll out in 2015.