UK SMEs seek more alternative financing than ever before

Small businesses in the UK are seeking more alternative finance than ever before, figures from PayPal have revealed.

The amount of finance advanced by PayPal Working Capital in the UK has risen from £400 million in June 2017 to a total of £625 million today. Over 30,000 UK businesses have now benefited from a share of the $5 billion (£3.6 billion) that PayPal Working Capital has provided globally since 2014.

The new figures mark a 56% increase over the past 12 months in the total amount advanced, demonstrating the ongoing need for alternative financing that bridges the gap left by traditional funding providers.

Bank branch closures proved to be a blocker for many communities in the UK, but for small businesses, technology has provided a convenient alternative: 70% of PayPal Working Capital advances issued in the past year, all of which are made online, were outside traditional bank branch hours.

“Almost a decade after the credit crunch, many British small businesses are still struggling to get funding for their future development,” Norah Coelho, Director of Business Financing, PayPal UK, explained.

“We launched PayPal Working Capital in the UK in 2014 to help fill this funding gap. It’s obviously meeting a real need, as since the launch PayPal has advanced £625 million to more than 30,000 British businesses.”

While new services and technology appear to be at the forefront in assisting new UK businesses get off the ground, Coelho isn’t pessimistic about the future of banks.

“The banks will always play an important role in business financing,” Coelho continued, “But we’ve found that over 70 per cent of PayPal Working Capital funding was issued outside traditional UK bank opening hours. We’ve replaced the lengthy in-branch application process for traditional business finance with a fast, online alternative for PayPal’s small business customers.”


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