As PayPal continues to strengthen its position with SMB services, the company’s U.K. unit is offering an update on the progress made by PayPal Working Capital.
The company revealed Monday (June 19) that it has facilitated more than $500 million (£400 million) in working capital to U.K. small businesses via its financing solution, which launched in 2014. PayPal U.K. said it has so far served more than 22,000 SMBs, and experienced a 116 percent increase in cash advances provided in the last year.
“PayPal made its name pioneering eCommerce, making it possible for businesses to grow their sales and reach millions more customers online,” said PayPal U.K. Managing Director Mark Brant in a statement. “In the years that followed the credit crunch, we saw the impact it was having on our small business customers, many of whom were struggling. We saw an opportunity for us to help and set about making PayPal Working Capital a reality.”
In releasing the latest statistics for PayPal Working Capital in the U.K., the company also pointed to research it conducted that found a third of cash advances provided to U.K. SMBs via PayPal Working Capital are in markets that have experienced a loss of at least 50 bank branches in the last four years.
According to Brant, this underscores the importance for innovative financing solutions to fill in credit gaps left by a reduction in access to traditional bank loans.
“Technology companies like PayPal are finding new ways to serve customers where the products and services of the past are coming up short,” he said. ”Of course, banks will continue to play a pivotal role in small business funding, but we need to collaborate more to make financial services work better for small businesses. They’re the linchpin of the British economy. With uncertain times ahead, it’s even more important we innovate and equip small businesses with the tools they need to succeed.”
The $500 million provided to SMBs in the U.K. is a sizable portion of the more than $3 billion in overall loan originations by PayPal Working Capital (October 2015 stats pegged loan originations at $1 billion).
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