eBay to Launch Loan Service for Sellers Who Have Difficulty Accessing Covid-19 Support

ebay logo

Online retailer eBay is launching a new money lending service for commercial sellers on its platform after finding that many have difficulty accessing government loan programs during the Covid-19 pandemic.

The bosses have partnered with fintech firm YouLend and will allow 300,000 small and medium-sized businesses that use eBay to access loans between £ 500 million and £ 1million.

Loans can be approved within 24 hours and will then be repaid based on a percentage of each applicant’s income, rather than traditional fixed monthly payments.

Managing Director Murray Lambell explained, “Our job in the market is to look at where there is friction in the market and where we can connect the buyer and the seller.

“It’s obvious to online businesses that they haven’t had access to the capital they need. This was exacerbated during Covid, but it has already been.

He told the PA News Agency that many had struggled to access funds, including the government’s rebound loan program, due to the fact that many sellers were acting as independent traders.

The boss added that traditional mainstream lenders had been overwhelmed by loan applications from companies that struggled during Covid-19.

Mr Lambell said: “It’s slightly perverse and goes to the economic debate on where do you place your bets. The ripple effect of Covid (with banks lending to struggling businesses) is that some businesses have not been able to grow as fast as they had hoped. “

A new survey by eBay found that 40% of small businesses were denied a loan from a bank, while 31% were denied a government guaranteed loan during the pandemic.

As a result, nearly one in three small businesses said they were at risk of going bankrupt in less than a month due to insufficient access to finance.

The eBay chief explained, “Traditional routes like banks are more skeptical of businesses that are online or in the market model.

“At Covid, this has been exaggerated because these loans don’t target higher growth online businesses because banks don’t have the capacity to process them.”

The new lending system will use eBay’s own internal data on sellers who use its site to determine amounts, including sales data, pageviews, and a user’s rating.

The company did not disclose what the interest rates on the loans would be except to say they would be “competitive.”

Mr Lambell added: “I am not here to make money with financial services. My interest is to make sure that the sellers of the platform win. When my business grows, his business grows. “

He also said he would expect traditional lenders to follow suit with more tailored lending approaches, especially on sites such as eBay where market sellers may see peaks and troughs in sales in the marketplace. during the year.

The boss said, “Open banking has opened up a new area of ​​possibilities and we believe it is our responsibility to ensure that we use those opportunities to better serve our customers.

“We are open to new opportunities and we hope others will explore new ideas as well.”

About Nunnally Maurice

Check Also

Senators Markey, Menendez and Klobuchar challenge Facebook Marketplace’s ’10-shot rule’ to ban gun sales

In letter to Zuckerberg, senators call recent reports of Meta’s lax enforcement of gun sales …

Leave a Reply

Your email address will not be published.