PayPal is expanding its working capital programme for merchants through the acquisition of online lending firm Swift Financial. Terms of the deal were not disclosed.
PayPal has been providing working capital to its merchant clients since 2013, handing out more than $3 billion to around 115,000 small businesses. Currently the service only offers loans of up to $125,000 and is only open to firms that use its payments services because that data is used to assess credit-worthiness.
The Swift Financial deal, set to close later in the year, “will give PayPal access to more outside data, enabling it to offer longer term loans of up to $500,000 as well as target firms that are not -long-term clients”, according to finextra.com.
Darrell Esch, commercial officer, global credit, PayPal, says: “At PayPal we believe that small businesses are the engine of the new global economy, and that small business owners should be able to access the capital they need, when they need it, based on the strength of their business. (…) the acquisition of Swift Financial will enable us to better serve small businesses by enhancing our underwriting capabilities to provide access to affordable business financing solutions to more businesses to help them grow and thrive. (…)With these capabilities, Swift Financial will help accelerate our efforts to democratize financial services by enabling PayPal to further fill the small business funding gap.”