PayPal: “We are now one of the top 5 lenders to small businesses in the United States”

PayPal’s Q4 earnings report failed to mention its small business lending division, but an internal assessment of its Working Capital product was made known through a recent interview published by McKinsey.

“Through our PayPal Working Capital product, we are now one of the top five lenders to small businesses in the United States,” said Franz Paasche, PayPal’s SVP, Chief Corporate Affairs Officer at PayPal. “Seventy percent of those PayPal Working Capital loans are going into regions of the country where banks have pulled out, sometimes for good economic reasons,” he continued.

Despite the self-reported achievement, the company’s attention is now focused in a different sector of lending altogether, in the rapidly expanding consumer market known as Buy Now, Pay Later (BNPL).

“Buy Now, Pay Later is a perfect example of the type of investment we are making to give shoppers and retailers more reasons to engage with PayPal,” said CEO Dan Schulman during the company’s recent earnings call. “Buy Now, Pay Later is available in 8 markets, including with Paidy in Japan. We continue to see rapid consumer adoption, with $3.2 billion of Buy Now, Pay Later TPV in Q4 alone, a $13 billion run-rate, with Q4 growth of over 325% year-over-year. We have processed 54 million loans globally since launch, with 13 million unique consumers and 1.2 million merchants using our Buy Now, Pay Later services.”

PayPal’s stock plummeted by 20% after earnings were released that was connected to challenges unrelated to lending facing the company.