Online payments giant PayPal has entered into an agreement to acquire Swift Financial, a Delaware-based business that provides working capital solutions to small businesses and entrepreneurs in the US.
PayPal claims to have provided more than $3bn in funding to about 115,000 small businesses across the US for their working capital needs, through its subsidiary PayPal Working Capital, established in 2013. And, by acquiring Swift, PayPal says that it can further extend these services.
The company stated that small businesses are driving engines behind the new global economy and they should be provided with sufficient working capital needs, based on their respective strengths.
PayPal said: “We know and value Swift’s technology platform and people, and we believe their talent and capabilities will further strengthen our overall merchant value proposition.
“Building upon an existing commercial relationship, the acquisition of Swift Financial will enable us to better serve small businesses by enhancing our underwriting capabilities to provide access to affordable business financing solutions to more businesses to help them grow and thrive.”
According to PayPal, its working capital division will provide access to capital based on its proprietary insights and it will use Swift’s technology to gain access to supplemental information.
This two-way assessment is expected to help PayPal in understanding the strength of a business and to give access to complementary financing products to small and medium businesses. With these features, PayPal can accelerate its efforts to democratise financial services.
Financial terms of the acquisition were not disclosed.
Closing of the acquisition is expected to take place, later this year and is subject to certain conditions including the expiration or early termination of the applicable pre-merger waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
PayPal says that the two companies, with their services can tap into the huge potential of small businesses.
Image: PayPal corporate headquarters. Photo: Courtesy of PayPal, Inc.