The round was led by Mohr Davidow Ventures with existing investors BlueRun Ventures, David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens, and the UPS Strategic Enterprise Fund also taking part.

Kabbage - which raised $6.65 million in January - says it will use the money "to pursue additional marketplaces, distribution relationships, new financial products and international expansion".

Atlanta-based Kabbage targets merchants selling goods online, offering capital advances. It currently works with sellers on eBay, Amazon and Yahoo! and will add Facebook, Etsy, Shopify and Marketplace at Sears.com in the next six months.

The firm's technology platform checks online merchants' business, including transaction history, customer traffic and reviews and products to make a judgement on offering working capital within seconds of an application.

If the data stacks up, the firm makes an offer and the applicant decides whether to accept terms before having money sent to them by PayPal. According to Bloomberg, more than 2000 have now signed up, with 300 more loans each week.

Kabbage also revealed today that it has secured its first US patent for "apparatus to provide liquid funds in the online auction and marketplace environment," covering a system by which a provider of capital taps information regarding a merchant's sales history on an e-commerce site to make a decision about providing funds.

Rob Frohwein, founder and CEO, Kabbage, says: "Although small business fuels the majority of growth in the US, it is extremely difficult and time consuming for these businesses to apply for and actually receive financing from a traditional bank. Kabbage fills this need by providing money to these businesses in a quick, easy and painless way, helping them to further grow their businesses and boost the economy."