On Tuesday, PayPal announces the launch of its Financing Pro solution in France to fund businesses’ cash needs and purchase a variety of supplies. The loan offer complements the PayPal Commerce Platform, a payment and commerce platform designed for VSE and SME.
According to the e-payments company, the solution offers business customers “the ability to receive financing in just minutes and get reimbursements tailored to their business,” according to a press release.
PayPal enters the market of credit institutions to facilitate access to loans in the post-COVID period. According to a survey conducted by YouGov, 57% of VSE and SME executives in France did not receive funding due to demands from financial institutions, the company said. In addition, 47% of respondents believe that the pandemic led to a drop in sales, and 26% admit to abandoning or postponing projects during this period.
The amount is limited to 160,000 euros
The amount of credit provided by PayPal to each business depends on the seller’s PayPal sales. Refunds are made based on the return rate chosen by the seller, ranging from 10% to 30% per sale. With this system in place, the group indicates that “hidden costs” do not apply. Rather, a single fixed fee is charged to the seller when he takes out a loan.
This funding can then reach a maximum of €160,000 for regular PayPal customers and €130,000 for new customers.
The provision of funding is subject to control. The company analyzes payment data to check the company’s sales performance as well as its history. According to PayPal, by “reducing the insurmountable delays of traditional financial institutions,” the online application process for this loan can take only “a few minutes.”
“This decision is part of our drive to democratize VSE/SME access to tools that have so far been reserved for larger companies. Through the strong relationships that PayPal maintains with its professional clients, Financing Pro enables them to meet their development challenges,” said Francis Barel, director of PayPal France, as quoted in the press release.