VSE / Small and Medium Enterprises: A New Financing Solution to Support Their Growth

As an OECD report published in March 2022 indicates, government support measures (direct loans, subsidies, deferred payments, etc.) have brought credit to SMEs to unprecedented levels during the pandemic: in France, their level of superiority has increased By more than 27% between 2019 and 2020, to reach 336 million euros. This same report notes that the end of the health crisis is once again putting pressure on small businesses: Faced with the gradual lifting of subsidies and rising energy and transportation costs, they need, more than ever, to boost their cash flow to ensure they can restart under good conditions. Small and medium businesses are a critical issue for economic recovery in developed countries, and they play a major role in growth in terms of employment and wealth creation. For example, in France there are 3.9 million SMEs (source of financing for SMEs and entrepreneurs 2022), which contribute to its regional and national economic dynamism.

Getting a loan: an often risky process

YouGov Study1 Commissioned by PayPal, it indicates that 45% of French VSE/SMEs have already applied for a loan in amounts between 5,000 and 50,000 euros. This financing is aimed at meeting cash needs in 31% of cases, developing or diversifying the activity (26%) or purchasing supplies or inventory (20%). The problem: The process of getting a loan often feels like a journey full of pitfalls. Thus, 55% of the companies questioned indicated that they had trouble meeting the requirements of traditional financial institutions, and 26% of them complained about the length of procedures. The number of documents required is also an obstacle for 13% of respondents.

PayPal Financement Pro, the bespoke financing solution offered by PayPal and now available in France, can bring a breath of fresh air to small business managers. This offer is especially intended for French small and medium-sized companies that are facing difficulties in subscribing to their loan. ” We are proud to present […] A fast and agile financing solution, adapted to every need. This solution is part of our desire to democratize SMB/VSE access to tools previously intended for larger companies. Building on PayPal’s strong relationship with the VSE/SME ecosystem, PayPal Financing Pro makes it easier for them to plan for the future of their business. says Francis Barel, Director of PayPal, France.

Professional financing, simplicity and speed in the program

What is the strong point of Financing Pro? Above all, its speed: the simplified online application process makes it possible to get the financing agreement and cash out in just a few minutes. The criteria for approval of a credit request is based on the company’s PayPal business account history.

Refunds, without a predetermined duration, are automatically deducted from the proceeds of each sale created on the company’s PayPal account based on a rate set by the merchant (between 10 and 30% per sale). No recurring interest, late fees or hidden fees – the merchant only pays one commission at the time of loan being granted.

PayPal Financement Pro has already supported small businesses in many markets, and a solution has been available since 2013 in the US, and more recently in Australia, the UK and Germany. In 9 years, these four countries have already given more than $22 billion in advances to small businesses. In Germany alone, more than 8000 VSE/SMEs have benefited from financing in the 12 months since launch, with a cumulative amount of over €250 million.

Full service offer for small businesses

With the launch of PayPal Financement Pro in 2022, PayPal intends to continue to facilitate the development of French SMEs and VSEs by reinventing traditional borrowing circuits. An offer that effectively complements the range of solutions already available to small businesses: 4X free payment, fraud protection, risk management, e-commerce support tools, etc.

1Study Methodology:
The study was conducted by YouGov Institute for PayPal France with a sample of 512 VSE/SME Managers (April 2022).
The sample represents companies with fewer than 10 to 250 employees in France.
The survey was conducted online, on a YouGov property panel.

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