PayPal is planning to bring their working capital programme to the UK, which involves offering advances to small companies against their future sales.
The company hopes to better enable small businesses to get access to money. Businesses have been struggling to find capital since the recession hit the country as banks have been less willing to dole out money.
The system works by looking at a company’s sale history by using an online application form. A decision is then made in a few minutes and the business will get their cash. They pay a flat fee for this, but then PayPal recoups the money by taking a percentage of their sales. This means there is no set monthly repayment scheme.
The programme has been a success in the US so far with $140m being dished out to businesses across the States. According to a survey, 90% of users said they’d recommend it.
The MD of PayPal, Cameron McLean, said: “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.
“PayPal is well placed to make a difference. We’ve been helping businesses thrive online for almost 15 years. And our close relationship with our business customers means we can approve a cash advance and provide the money in minutes.”