According to The Australian Business Review, PayPal Working Capital has extended more than $85m to about 3,000 small businesses since launching in Australia in late 2014.
In contrast, Prospa — the biggest “fintech” online small business lender — in May revealed it had cracked the $150m mark after four years of operations.
SocietyOne, the biggest “marketplace” lender, which has also been in business for four years, pushed through $100m personal loans in April.
PayPal’s product is also different as we described in an earlier post, with the unsecured loan of up to $97,000 being offered only to merchants that use its payments network, so borrowed funds can be instantly distributed following a five-minute application.
There’s a one-off upfront fee and repayments come out of daily sales, typically between 10 per cent and 30 per cent of turnover.
Interest rates are typically in the “teens and 20 per cent” range, differing based on merchants’ repayment choices and risk.
Including the US and Britain, PayPal Working Capital recently surpassed $US2 billion ($2.6bn) in loans. While Australia makes up a small piece of the pie, the business is profitable.
