PayPal Exceeds $30B in Business Loans and Merchant Cash Advances
March 26, 2025
PayPal has officially crossed $30B in merchant cash advance and business loan originations, the company announced.
“Access to capital is consistently one of the top challenges small businesses face as they look to maintain and scale their businesses,” shared Michelle Gill, EVP and GM of SMB and Financial Services at PayPal in an official release. “Traditional business loans are not only difficult to secure for small businesses, but the application process can be challenging and prohibitively time consuming. PayPal’s financing solutions have a streamlined online application process with no lengthy paperwork or extensive credit checks, and approved PayPal loans are funded within minutes. We launched PayPal Working Capital and PayPal Business Loan to serve this important need, and to provide a quick and responsible way to inject much needed capital to help fuel small business growth.”
PayPal had pulled back significantly on originations for a while as can be seen here but ramped back up last fall. For example, PayPal said that global originations had surpassed $25.6B at the end of Q2 2022 across a total of 1.3 million transactions. That means it has added roughly $5B in originations across 100,000 transactions in the span of almost 3 years since they now report 1.4 million total.
“Small businesses have seen tremendous value in PayPal Working Capital and PayPal Business Loan, as both offerings continue to receive remarkable feedback from customers,” the company said. “Additionally, both offerings have achieved Net Promoter Scores of 76 and 85 respectively and our customers renew loans or access our offerings on a repeat basis more than 90% of the time. Businesses also experience an increase in their total PayPal payment volume by 36% after adopting PayPal Working Capital and 16% after taking a PayPal Business Loan.”
Why MCA Companies Need Syndicators
March 21, 2025David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
The merchant cash advance (MCA) business is all about balance—managing risk while keeping capital flowing.
Many funders hesitate to bring in outside capital, especially if they already have a line of credit. The thinking goes: “If I have my own money, why should I split the profits?” But that perspective overlooks the key benefits syndication brings—not just in terms of capital but also risk mitigation and overall profitability.
The biggest advantage of working with syndicators is the ability to do more deals while spreading out risk. The more deals you fund, the more you diversify, which naturally increases your stability. If you’re advancing your own money, you’re taking on 100% of the risk. But with syndicators, that exposure is shared. Even if you already have a line of credit, using syndication means you’re not tying up all your liquidity in a few high-risk advances. Instead, you’re spreading your capital across more opportunities, reducing the chances of any single deal tanking your portfolio.
Syndication also creates a financial buffer through fees that MCA companies collect upfront. Syndicators don’t just bring in money; they pay to participate in your deals. Typically, they compensate the funder in one of four ways: paying an upfront fee (usually 3-5% of the RTR or 5-7% of the principal), paying part of the fee upfront and the rest as the deal is repaid, covering a portion of the origination fee, or splitting the profits at the end of the deal. These fees give MCA companies immediate cash flow, which helps offset risk before repayment even begins.
Consider this: if you fund a $100,000 deal and syndicators take on 50% of it while paying a 4% fee, you’ve immediately reduced your exposure. You’re technically in for only 48% of the deal, not 50%, because that fee cushions your position. On a larger scale, this compounds into significant risk reduction. If your default rate is 15% and syndication lowers your risk by just 5%, that’s a major improvement. A 10% default rate instead of 15% can be the difference between profitability and loss.
Origination fees further sweeten the deal. Some MCA companies split origination fees with syndicators, while others keep the entire portion from the syndicator’s investment. For example, in a $200,000 advance where the syndicator puts in $100,000, a 10% origination fee would total $20,000. If the funder keeps the entire 10% from the syndicator’s portion, that’s $10,000 of instant income—reducing risk right away. This means that even before payments start coming in, the MCA company is in a stronger position.
Profit-sharing models also offer advantages, particularly for MCA companies that want to keep more control over the deal structure. In these setups, syndicators don’t pay an upfront fee but instead share in the profits at the end. This allows funders to leverage external capital while still maintaining higher margins on successful advances. Some models even combine a profit split with an upfront syndication fee, offering the best of both worlds—immediate cash flow and long-term upside.
The bottom line is simple: syndication makes MCA portfolios stronger. It adds a layer of protection, reduces risk, increases deal volume, and injects capital upfront. A stronger, more diversified portfolio leads to more stability and, ultimately, higher long-term earnings.
For any MCA company serious about growth and sustainability, working with syndicators isn’t just an option—it’s a necessity. Overlooking these benefits in the name of not wanting to share profits shows a short-term mindset that may cost more in the future.
Talk to People, Ask Questions, and Deals Are Everywhere
March 17, 2025
“Well, when everybody says it’s tough, that’s when I start smiling, because I’m going to sit there and collect them all,” said Adam Oster, Director of Canyongate Financial. Oster was talking about financing deals for trucks in a tough market, though he’s known to be able to handle any kind of equipment in any kind of market. Part of the joy he gets from the challenge of the job is rooted in just how many great people he gets to speak with. Connecting, helping, and building relationships are his passions. And it never stops for him.
“I like to jump in and do everything. I have to have direction so I got to be talking to somebody,” Oster said.
True to form, when he’s taking a break from talking about semis, box trucks, and medical equipment, he’s marketing 3″ filled bones, beef cheek rolls, and gourmet treats for dogs.
“My fiancée has a dog food company, so Thursday, Friday, Saturday, Sunday, we’re out slinging dog food, we’re promoting her business,” said Oster. That business is called Abby’s Barkery, and he’s proudly featured on the company’s main Shopify page. Sometimes the two worlds overlap—in that he could be processing payments for treats while placing an equipment deal at the same time.
“…by 7:30 you get home and you’re like, ‘I think just every day is Monday.’ That’s how I’m going to look at it. Every day is just Monday in my life,” he said jokingly.
Oster began his career in mortgages, followed by a stint as the owner of a supplements store. He launched Canyongate right in the early days of the COVID pandemic after a colleague said he’d be really good in the field.
“When we came on we were strictly working capital, and working capital has its peaks and valleys, so I needed to fill the gap when working capital was down,” Oster said. “I’m like, ‘Hey, let’s transition here.’ So we started onboarding.”
Onboarding with equipment financing providers is precisely what he did. It helped that some of those providers were located right in his own neighborhood, which shortened the learning curve and helped lead to some great relationships. These days, Canyongate’s business is now 70% equipment financing and 30% working capital. Like others deBanked has spoken to, not everyone who makes deals in equipment financing starts off by knowing everything about equipment.
“I knew enough in transportation, semis, trailers, that we lean there. But then I found very quickly that you got medical equipment—everything is a piece of equipment, essentially. So if I get a lot of invoices and I don’t know what they are, I have to Google it. I’ve got to look because the broker doesn’t tell you what it is. So I’m looking it up. I’m like, ‘Okay, this is a CNC machine… or this is a piece of yellow iron.'”
By now he knows so many things so well that he helps other brokers learn the ropes. As part of that he does coaching and training for large groups of people looking to break in. For example, they recently conducted an orientation for 500 people, where they started off by teaching them to focus on a niche. That could be semis or trailers or something else to get in the game. The deals themselves can come from anywhere, including simply knowing someone at the local gas station who might know someone who, in turn, knows another person—turning into a referral. It’s all about building relationships and asking the right questions.
“At the end of the day, it’s just conversation, ‘what are you trying to buy?’ And they’ll tell you. If I don’t know what that equipment is, I’ll say ‘what do you use that equipment for?’ They’ll tell you.”
For brokers already offering products like MCAs, they’re already on the call to steer the conversation in that direction if they so choose, but it’s important to do it thoroughly since the process to get a deal done is a bit more stringent.
“Ask if they need a truck, ask them what they need to finance,” Oster said. “When you’re submitting an equipment finance deal, it’s not an app and banks with no write up. You’ve got to tell me about the customer. Tell me about their experience. How are they going to use this equipment? There’s a lot of detail that goes into the deal before you even submit for underwriting.”
To that end, he said it’s important to set expectations for brokers looking to do equipment finance deals because it isn’t exactly the same even though it’s similar. On one hand if a broker can already sell a daily or weekly payment working capital deal then surely they’d be able to sell a monthly payment equipment financing deal. It’s a no-brainer when it comes to being able to offer the terms.
“Don’t fear it, ask the right questions,” he insists about taking the leap. And be prepared to ask them anytime anywhere. For example, he’s funded five MCA deals just through relationships he’s made through the Barkery.
“That’s a true story,” he said. “And I have pulled probably six or seven equipment deals out of the last year and a half from working at [my fiancée’s] business. So again, it goes back to it’s just conversation. Look at people’s needs. People tell me, ‘Well, I want to update my little shop and do all these things, I just don’t have the money.’ Well, what do you need? ‘Well, I need shelving, I need this…’ ”
Then he offers to help. Suddenly it’s the perpetual Monday all over again where he’s placing the customer while simultaneously processing payment for a good pup to chew on a lamb foot or a mammoth bone.
“And that’s how deals come about. Opportunity is everywhere. I love it. I get excited, man. I get all hyped up about this.”
Ryan Showe on Winning This Year’s Broker Battle
March 3, 2025
“What being a broker means to me is servicing your clients in the best way possible, really putting their needs before anyone else’s,” says Ryan Showe, VP of Sales at Long Island-based Lexington Capital Holdings. “Ultimately, at the end of the day, we don’t have a job if our clients aren’t happy, so just constantly doing the right thing, putting your best foot forward, and making sure that you’re doing everything ethically and honest.”
Showe was the winner of the 2025 Broker Battle at deBanked CONNECT Miami for the revenue-based financing category, earning him the recognition of Top Broker and the recipient of some prizes along with it. Showe has been in the business for just a little over three years, starting at Lexington during its beginnings. Back then, learning the ropes while doing the work meant putting in 70-80 hour weeks on a regular basis. That included not only seeking out advice from the experts but also watching videos and reading books to fully immerse himself in the mindset of what it would take to become successful.
That effort is paying off and today Showe specializes in the most delicate part of the process at Lexington, helping clients who have applied get to the finish line with a deal while managing lender-side negotiations and communications. On the latter side, that means being highly familiar with the guidelines of more than 60 financial service companies at any given time.
“Anybody can get someone to apply and just fill out a quick one-page application, send over a couple bank statements, but really selling the deal, there’s a specific art to it,” says Showe. “It’s really important to be an expert in your industry and know all the lender guidelines, know what the backend process looks like, because every lender is going to have a different process, whether there’s certain steps that some lenders want, whether it’s a manual-login or DecisionLogic. There’s so many ins and outs to every different lender. And just being able to know all that off the top of your head and just really sound like an expert.”
At Lexington, one of the recent educational team-building strategies was to host an internal Broker Battle in which 30 employees participated in a double-elimination competition. The company’s CEO, Frankie DiAntonio, devised the format and questions—not only role‑playing scenarios but also testing general industry knowledge with trivia. Showe says it’s good practice to be put on the spot in front of a crowd, because a key part of sales is thinking on your feet and executing when it counts. Doing it together with colleagues made for a fun experience in a company that prides itself on a family‑like atmosphere, while also mirroring the competitive nature of the industry where many brokers vie to serve the same customers. It’s game time all the time.
“I even tell my clients, ‘competition is always going to breed the best results,'” Showe says. “If you want the best of the best, you have to make people compete. And it goes down to even selling a deal, right? So if I have a deal and another company has a deal, compare my numbers against their numbers. I’m going to do anything I can to win that business.”
By happenstance, Lexington’s Corey Digiantomasso was one of the six finalists selected to compete in deBanked’s inaugural Broker Battle in 2024, where he put up a very impressive performance. This year was Showe’s turn where contestants weren’t given much background on the format other than that it would be roleplay-based. Showe kind of liked the mysteriousness of it.
“I’m best at showing up and just getting the job done,” Showe says. “So just doing what I do every single day made it easier for me at least.”
On his victory, Showe described the feeling as awesome while also recognizing that his opponent in the Battle, Joe Sasson, was a very worthy competitor. A large crowed showed up to support both of them during the championship.
“It was great to just see all the hard work that I’ve been putting in over the last three years pay off and be crowned #1 in the industry. It goes a long way for not only myself, but for the company as well.”
Shopify Capital Originates ~$3 Billion in Merchant Funding in 2024
February 11, 2025
Shopify Capital originated ~$3 billion worth of MCAs and business loans in 2024, up by 50% over the prior year. For the sake of comparison, online small business lender Enova originated $4 billion in 2024. Shopify is an e-commerce platform first, however, and is growing on all fronts
“2024 was a stand-out year for Shopify,” said Shopify President Harley Finkelstein. “We seized every opportunity to fuel our growth and it showed in the results quarter after quarter. Heading into 2025, we are committed to making entrepreneurship more common and further establishing Shopify as the go-to commerce platform for businesses of all sizes. With our proven track record, the agility of our platform, and our relentless focus on merchant success, we like our odds in this evolving technology landscape, and are excited about the opportunities it brings for Shopify and our merchants.”
Lightspeed Accelerates Growth of its MCA Business
February 9, 2025Lightspeed Capital accelerated the growth of its principal issued for its merchant cash advance program, the company shared in its latest quarterly earnings report. Normally the company has more to say about this division but its attention was focused on an “executing a full transformation plan.”
As part of its previously-announced strategic review, the Company conducted an in-depth evaluation of its portfolio, including market attractiveness, competitive dynamics, and its right-to-win as well as evaluating the best ownership structure to navigate Lightspeed through a transformation. The Company has already set its transformation plan in motion, focusing on growth in retail in North America and hospitality in Europe, both leading growth engines, with a strategic focus on expanding locations and increasing software and payments ARPU, with the other business areas optimized for efficiency and aimed at driving a maximum profitability for the whole business.
The Company-wide transformation to deliver on the new strategy will focus on:
- Go-to-market: enhancing Lightspeed’s go-to-market strategy with targeted outbound efforts, field sales and local marketing expansion, and verticalized execution to maximize efficiency and improve win rates, including deepening supplier integration in focus verticals and deploying AI-driven customer acquisition across retail in North America;
- Product & Technology: investments focused on key growth areas—enhancing inventory management, forecasting, and supplier integration for retail in North America, while optimizing operations, guest experience, and analytics for hospitality in Europe;
- Capital Allocation: transformation initiatives to free up capital for investment in growth areas; and
- Share Repurchase: a share repurchase program to return up to $400 million in cash to shareholders, including the immediate execution of approximately $100 million3 under our current authorization, plus an additional $300 million, in each case subject to market conditions.
PayPal: Our merchants grow after taking a business loan from us
February 5, 2025PayPal is feeling optimistic about its business loan program now that it has been reset on a path toward growth. “As the business matures, PayPal Business Loan offers more traditional merchant financing to match the increasing complexity and multichannel nature of larger businesses,” said CEO Alex Chriss during the Q4 earnings call. “Our business financing solutions increase loyalty and engagement, driving the PayPal flywheel. Merchants typically increase their PayPal volume by 36% after adopting PayPal Working Capital and 16% after taking a PayPal Business Loan. Our merchant lending originations were $3 billion in ’24, demonstrating our leadership and that there’s plenty of room to grow to support our customers.”
PayPal offers this product in the US, Germany, France, the Netherlands, UK, and Australia.
“The PayPal Working Capital product allows businesses to access a loan or cash advance for a fixed fee, based on their annual payment volume processed by PayPal,” the company states. “The PayPal Business Loan product provides businesses with access to short-term financing for a fixed fee or interest based on an evaluation of the applying business as well as the business owner. In the U.S., these products are provided under a program agreement with an independent chartered financial institution.”
Between them, PayPal is one of the largest online business lenders in the US.
MCAs Mentioned on SoFi’s Website
January 28, 2025Ever since SoFi launched a business loan marketplace last year, it has not been spoken about at length in its quarterly reports. It did not come up at all in its Q4 earnings call yesterday, for example. What is known is that it refers business owners to other sources for lines of credit, equipment financing, and more. However, there’s also an MCA screen on the scrolling window where it asks people to apply.
SoFi is notable in that it’s a bank, which is why it’s worth mentioning this at all. “Since acquiring our bank license in 2022, we’ve grown our deposits to $26 billion by iterating, learning, and iterating to make our product, marketing, and service better every day,” the company said yesterday.
