For more than 20 years, PayPal has been helping small business owners achieve their dreams. In the beginning, we provided marketplace sellers with a secure way to accept electronic payments from buyers. In 2013, we started pursuing another path: providing our small business owners with much needed access to capital in order to grow. So, in response, we launched PayPal Working Capital as a way to bring our merchants the financing they so desperately needed.
More than five years since providing access to our first loan, today, we’re proud to announce that we have provided more than $10 billion in funding through more than 650,000 loans to more than 225,000 small businesses around the world*. Today, PayPal financing programs are available in the US, UK, Australia, Germany, and Mexico (available through our partner Konfio). We’re honored to have been able to provide small businesses all over the world with a platform that enables merchants to grow their business, achieve their goals and reach their dreams.
In 2018, the average U.S. Small Business Administration 7(a) loan to small businesses was $420,401[1]. Additionally, the length of time it takes for businesses to receive the loan could be as long as 90 days. There is a clear need for loans of this size – and PayPal financing solutions helps meet this need with large loans, but we’ve discovered that small businesses need far more flexibility. Typically, small businesses only need a few thousand dollars to manage immediate concerns and, most often, they need it immediately. PayPal business financing programs can provide funding from $1,000 - $500,000 for small businesses looking for both quick decision-making and immediate usage as an application decision that usually occurs within minutes or hours which, if approved, allows the business to start using the funds almost immediately.
Since we started offering PayPal Working Capital, we’ve been able to better understand how businesses are impacted by the funds and how they are using the money. We know that PayPal Working Capital recipients who experienced an increase in revenue saw an average of 24% growth after accepting the funds and, of the businesses that grew, 82% experienced it in their first three months[2]. Additionally, when we asked borrowers who grew for their top four uses of the money, 58% said they purchased inventory, 30% said they used it to purchase equipment, 28% said they invested in marketing, and 23% said they used the money to help manage cashflow[3].
For PayPal Business Loans, we saw similar results: borrowers who saw an increase in sales had average growth of 21%, and 88% reported seeing a revenue boost in the first three months after accepting the loan[4]. Also, borrowers used the money to help manage cash-flow (44%), purchase inventory (37%) and invest in marketing (31%)[5].
Again, we’re extremely honored and proud to help merchants by providing them a more efficient and effective way to access the capital they need to continue to grow their businesses. We look forward to helping more small business owners achieve their dreams and grow within the global economy as we continue to make financial services more accessible.
*PayPal business financing is only available in the United States, United Kingdom, Australia, Germany and Mexico
[1] Congressional Research Service, Small Business Administration 7(a) Loan Guaranty Program https://fas.org/sgp/crs/misc/R41146.pdf
[2] PayPal Working Capital Growth Survey, April 2019
[3] PayPal Working Capital Growth Survey, April 2019
[4] PayPal Business Loan Impact Survey, Q2 2018
[5] PayPal Business Loan Impact Survey, Q2 2018
Darrell Esch, Vice President of Global Credit