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Paypal starts loaning money to vendors



Lend us a tenner till Friday

PayPal has started to finance the merchants who sell on the company's online marketplaces.

The company has tested a financing program for eBay sellers in the UK and it plans similar tests in the United States this year, a company spokesman said. Gary Marino, senior vice president, global financial services at PayPal, said at eBay's investor day that the programme has worked successfully with credit and we are experimenting with many new capabilities which will drive share like small business lending.

The UK program and the up-coming U.S. test focus on merchants selling on eBay.com, which number in the millions. The PayPal spokesman said the UK test was only available to a small number of merchants who were pre-selected. The company is moving into a vacuum left when Banks and other providers of loans for merchants pulled back after the 2008 financial crisis.

The combination of fast-growing online shopping and a lack of credit for smaller businesses has created strong demand for new types of financing among sellers that ply their trade on Amazon.com, eBay.com and other marketplaces.

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