eBay launches small business loan service for its 300,000 SME sellers

eBay goes into the same-day small business loan market, offering finance anywhere between £500 to £1m

eBay has gone into the business of lending directly to its small business sellers, offering loans of anything betweeen £500 and £1m to SMEs.

In doing so, eBay is parking its tanks on the lawn of former subsdiary PayPal, which already offers quick loans to small business users.

PayPal has also been aggressively growing its lending business, with an outstanding loanbook of $2.7bn at the end of the first quarter.

>See also: Norah Coelho of PayPal Q&A: ‘Getting access to finance is incredibly important’

The move also puts eBay in competition with Britain’s less-well-capitalised high-street banks that target small business customers. By way of comparison, eBay’s $41bn market capitalisation is about 50 per cent higher than that of NatWest, the UK’s largest small business lender.

eBay says its same-day loan service is needed to help its 300,000 small business users bounce back quickly from the pandemic.

Nearly one third (31 per cent) of the UK’s 5.9m small businesses face going bust in under a month due to inadequate access to finance, according to research.

>See also: Qardus opens Islamic finance to small business for first time

Two in five (40 per cent) small business owners have been denied credit from banks, while one in three (31 per cent) have been turned down for a government loan, said eBay.

Forty-four per cent of SMEs have not accessed any Covid-19 support in the past 12 months.

Online lender YouLend is the first finance partner to join eBay’s Capital for eBay Business Sellers (CEBS) initiative.

eBay says that hundreds of small business sellers have already borrowed money through CEBS.

Murray Lambell, general manager, eBay UK said: “Small businesses make up 99% of all UK businesses, yet they have been financially excluded from traditional lenders and let down by COVID support schemes. That’s led to a serious under-investment, leaving many at risk of going under while others are prevented from reaching their full potential.”

Further reading

Small businesses struggling to get credit from Recovery Loan Scheme

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Tim Adler

Tim Adler is group editor of Small Business, Growth Business and Information Age. He is a former commissioning editor at the Daily Telegraph, who has written for the Financial Times, The Times and the...