PayPal has provided more than £1 billion in financing to UK small businesses through its Working Capital lending programme.

SME lending was up 60 per cent year-on-year. Back in May last year, PayPal announced that it had crossed the £625 million threshold. And that was up from £400 million in July 2017.

One in five out of the 116,000 cash advances made to date have been used to help companies grow.

PayPal-registered businesses can borrow up to £150,000 as a cash advance from the internet payments giant. Small businesses can borrow up to 30 per cent of their annual PayPal sales.

More than 37,000 businesses have borrowed money from the PayPal Working Capital scheme, which debuted five years ago. PayPal says its growth in small business lending comes at a time when traditional bank lending to small businesses is flat.

Norah Coelho, director of business financing at PayPal UK, said: “Our in-depth knowledge of our small business customers mean we can typically approve and issue a cash advance in minutes after a quick online application is completed. The fast, online application means they can apply at any hour of the day and avoid lengthy in-branch processes, leaving them free to spend time focusing on running – and growing – their business.”

Because PayPal already know the applicant’s business and sales history when using the payment system, owners can have a cash advance approved in minutes once an online application form has been completed. PayPal claims the online application only takes five minutes to complete.

Borrowers pay PayPal a fixed fee for the facility – which varies from business to business – and repayments are applied automatically as a fixed percentage of a company’s PayPal takings, giving businesses flexibility to pay back only when they’re making sales. No sale, no repayment. Repayments are no more than 10 per cent of total cash advance (including the fixed fee).