International e-commerce business PayPal, which enables payments and money transfers to be made online, is to "help meet the small and medium enterprise funding gap" by providing its UK business customers with working capital through cash advances against their future sales.
The PayPal Working Capital fund will be trialled in the UK this autumn, with a more extensive rollout scheduled for 2015. Merchants (including eBay sellers) will be able to repay their advance with a share of their PayPal sales via card payments.
PayPal is keen to highlight that the advance is not a loan, so customers should not expect credit checks, interest charges or late-payment fees, while the advance will not have any bearing on the customer's business or personal credit record.
Advances will be approved or denied using the customer's sales history and will be made by means of an online application. If successful, PayPal says the funds will be available within minutes.
A similar scheme was launched in the USA last September, and it has since made more than $140m in cash advances to small and medium-sized businesses throughout America.
PayPal UK managing director Cameron McLean said: "Small businesses are the lifeblood of the British economy. But seven years after the start of the credit crunch, many of them are still struggling to get funding.
"According to the government, around a third of small and medium-sized enterprises rely on retained earnings or the owner's own finances rather than bank or equity funding. This means that many find it very difficult to finance their present needs or future growth. And the problem is acute for smaller, online businesses.
"PayPal Working Capital has been a big hit with business owners in the United States and we're delighted that our UK customers will be next to benefit from faster, fairer funding."