Alternative Small Business Lenders Continue to Invade Small Business Lender Brick & Mortar Turf
April 4, 2013
Paypal continues to experiment with online merchant financing. In the UK, PayPal offers merchants up to £25,000 based on their past PayPal sales receipts.
It’s pricy – in the 30% range.
However, new is the concept to re-pay the money as a percentage of their daily sales. PayPal offers a 12% rate, as long as the merchant repays 12% of their daily PayPal sales.
Alternative lender, venture capital funded, Kabbage has announced raising $75 million in debt, doubling the size of its small business loan fund to $150 million.
Kabbage’s model is to marry “Big Data” with merchant credit card cash advances. Last year, the lender made 39,000 advances to merchants and expects to break the 100,000 mark this year.