With small businesses in the US still struggling to secure funding from traditional banks, PayPal has entered the field with a new Working Capital service.
Initially available until December to "select" US firms which already process payments through PayPal, Working Capital promises to offer simple, fast and cheap access to loans.
Explaining its move into lending, PayPal cites Federal Reserve Bank of Cleveland figures which show that the total value of small business loans in the fourth quarter of 2012 was 78% less than in the second quarter in 2007.
Merchants can apply online, review and agree to the terms of the business loan and if approved, get funding - issued by lender WeBank - into their PayPal account in minutes.
Recipients repay the loan with a share of their PayPal sales, meaning that there are no minimum monthly payments. The eBay unit also insists that there are no fees.