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PayPal overtakes Funding Circle and OnDeck as lending hits $10bn since 2013

The payments giant says it's now lending "more than $1bn" per quarter.

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Since PayPal launched its Working Capital lending initiative in 2013, the payments giant has now lent over $10bn to 225,000 small businesses in the US, UK, Australia, Germany, and Mexico.

“It took PayPal twenty-three months to get to the first $1bn in lending and now we’re hitting more than $1bn per quarter,” said Darrell Esch, vice president of global credit at PayPal.

“Demand has never been in shortage.”

What’s so impressive is that this makes PayPal a bigger lender than Funding Circle, which has lent $8.8bn since 2010, and a faster lender than OnDeck, which lent $636m in the first quarter of 2019.

At this pace PayPal could hit $20bn in a little over two years.

The company didn’t reveal a geographic breakdown of which markets are driving the growth, but pointed out that in the US Small Business Administration loans typically take 90 days to approve.

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,” added Esch.

Unlike Funding Circle or OnDeck,PayPal is lending from its own balance sheet to existing PayPal merchants whose sales data it uses to assess the loans.

PayPal said the $10bn lent is across 650,000 loans, making PayPal’s average loan size around $15,000.

From its loan applications, the top business uses for these loans are purchasing inventory (58%), purchasing equipment (30%), marketing (28%) and managing cashflow (23%).

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