Paypal Holdings Inc (NASDAQ:PYPL)'s Working Capital Distributes $500 Million ...

Category: Small Business Borrowing
Published: Wednesday, 11 November 2015
Written by Admin

Although the company doesn't disclose how much in revenues or profits it generates from Working Capital, it has been willing to share some key metrics about its loan business. Since inception in 2013, Working Capital has distributed loans amounting to $1 billion to sellers on PayPal network. Most of the loan distribution happened over the last nearly six months with about $500 million being distributed in the period.

60,000 borrowers and counting

At least 60,000 merchants have borrowed money through PayPal's Working Capital program. Initially, borrowing on Working Capital was slow, but the numbers have recently spiked. From making $1 million in loans daily, PayPal now makes $100 million in loans every month.

Driver of alternative borrowing

According to PayPal's Darrell Esch, the financial crisis of 2008 is part of the reason demand for alternative small business borrowing is on the rise. It is easier for merchants to obtain quick funding through channels such as Working Capital than through conventional banking systems.

Members only

PayPal Holdings Inc (NASDAQ:PYPL) only offer its loans to its members, a strategy that has cut off those outside the network but helped subscribers because getting loans is faster and more flexible. Once PayPal has established that a merchant is eligible for a loan, the money can be deposited in their PayPal accounts instantly.

In repayment, PayPal takes a cut from the incoming funds of the borrower based on a repayment rate selected by the borrower.

PayPal Holdings Inc (NASDAQ:PYPL) doesn't reveal how much it makes from selling small business loans through Working Capital.

How to Profit From a Potential December Interest Rate Rise

Category: Small Business Borrowing
Published: Wednesday, 11 November 2015
Written by Admin

It has been the main topic of discussion amongst investors for more months than I care to mention. "When will the Fed raise interest rates?" has been the question to ask, it seems, after every data release coming from the US. Now, after a series of decent enough figures covering housing, manufacturing and jobless, the release of the Non-Farm Payrolls data on Friday has led many investors to believe that finally, we will see interest rates raised from their historic low in December's upcoming Federal Reserve meeting.

Improved Figures

There have been solid indications recently that the US economy is improving enough for the Federal Reserve to have enough confidence to raise interest rates. Just this month alone already, we have seen the Chicago PMI leap from 49.0 to 56.2, whilst the ISM non-manufacturing rose from 56.9 to 59.1.  Vehicle sales in the US rose-more-than-expected, rising from 18.17 million to 18.24million after analysts had been expecting the figure to fall to 17.80 million. Small business borrowing also increased and the overall US trade deficit narrowed to its smallest it 7 months.

However, it is the unemployment figures that have given Fed Chair Janet Yellen the greatest confidence to raise interest rates for the first time in nearly a decade. Despite those applying for unemployment benefit rising to a 2-month high, the release on Friday of the Non-Farm Payrolls data showing the lowest unemployment figure since 2008 and the largest single monthly gain of employed persons (271k) for the entire year, has raised the likelihood of a rate rise in December up by a few notches. So, how will this affect you?

Profit Opportunities

We are already seeing investors position themselves ahead of the potential December rate increase with the US Dollar rising to multi-week highs against a number of major currencies. EUR/USD fell to a 6-month low, USD/JPY rose to a 3-month high, USD/CAD up to a 6-week high and GBP/USD fell to a fresh 7-week low. Why? Because a raise in interest rates will mean investors abroad pile into the greenback to capitalize on the higher yields being offered.

I firmly believe that there is more support to be offered to the US Dollar, certainly in the near term, with only Thursday's Fedspeak and Fridays US retail sales report offering any major movement opportunities in a light economic calendar next week.

Medium term, until the next policy meeting by the Fed in December, there will be investors positioning themselves for a rate rise. This will boost the greenback even more and will certainly offer some BUY opportunities against the high yield currencies such as the Canadian Dollar and the Australian Dollar.

Meanwhile, other profit opportunities can be had in the commodity markets. Many commodities are traded in dollars. This means that a strengthening dollar will make commodities such as Gold, Oil and Copper more expensive to buy and less appealing to investors. Traditionally, gold trades inversely to the US Dollar, so when the dollar goes up in value, down goes Gold, offering plenty of profit opportunities by SELLING the yellow metal.

Overall, I expect the Fed to raise rates in December. US retail figures for November and early December will be key, but the economic indicators for the world's largest economy are strong enough that the Fed can raise rates next month. Should this happen, expect the dollar to appreciate further and commodities to decline further, providing simple short and near term profit opportunities for us all.

Manufacturing Hangs In As Construction Spending Soars

Category: Small Business Borrowing
Published: Tuesday, 10 November 2015
Written by Admin

ISM factory gauge hangs in

The closely watched manufacturing index eased just 0.1 point to 50.1 in Oct., a hair better than the 50.0 analysts had expected. New orders increased 2.8 points to 52.9, a good sign for future activity, but employment contracted, at 47.6. The exports gauge also improved, by 1.0 point, but remained in contraction territory at 47.6.

Construction spending surges

Spending rose 0.6% in Sept., better than the 0.4% gain expected, and was 14.1% higher vs. a year ago. Residential construction increased 17.2% vs. a year ago while the manufacturing sector was up 41.3%.

#149; Factory activity rebounded in Oct., according to Markits PMI, which rose 1 point to 54.1, in line with expectations. New orders rose the most since March. Export orders increased more modestly, as the stronger dollar weighed. Backlogs and employment both increased.

#149; Americans spent more in Oct., according to Gallups spending measure. The daily average of $92 was $4 above Sept. and above the average range of $81 - $91 notched during 15.

#149; Small-business borrowing edged up in Sept., according to a Thomson Reuters/PayNet index, which touched 140.4, up from 135.6 in Aug. Thats up 11% vs. a year ago, driven by more borrowing in transportation, warehousing and construction industries.

Eurozone PMI inches up

Markits final manufacturing PMI for Oct. was 52.3, up from 52.0 in the initial estimate. Several countries saw multi-month highs, including a 53.0 reading in Austria that was the best in nearly 2 years. New business and new export orders rose, as did employment.

#149; German manufacturing activity dipped to 52.1 from 52.3 in Markits final Oct. reading. That was a 3-month low. New business continued to rise, as did new export orders. But output expanded at the slowest rate in 3 months.

#149; Frances factory activity was unchanged at a reading of 50.6 in Oct., Markit said. New orders grew for the first time in over a year, but employment sank, with job cuts accelerating to the fastest pace since Dec.

#149; UK manufacturing surged in Oct., according to the Markit/CIPS PMI, which rose nearly 4 points to 55.5, its best month of output growth in over a year. Export orders grew a second straight month, but domestic orders drove most of the gains.

China factories still in slump

The official govt PMI was unchanged at 49.8 in Oct., while an index from Caixin/Markit rose more than a point to 48.3. But thats still in contraction, for the 8th straight month. Analysts had expected the govt index to touch 50.0.


#149; Factory orders for Sept., 10 am ET (forecast: -0.9%).


#149; ADP employment report for Oct., 8:15 am ET (forecast: 185,000 private payrolls).

#149; Intl trade for Sept., 8:30 am ET (forecast: -$41.1 bil).


Q3 GDP Growth Weak: Why You Shouldnt Believe It

Fed Opens Door To December Hike As Markets Stabilize

Need an unsecured business loan?

Category: Small Business Borrowing
Published: Tuesday, 10 November 2015
Written by Admin

If you're looking for funding to grow your small business, you're not alone. In fact, you're part of a large group of small business owners increasingly frustrated by the difficulty of accessing funding in order to create jobs and wealth.

Whether it's the glacial pace at which the bigger banks evaluate your loan application or the need to provide your family home as security, small business owners are turning to alternative lending options for a fast, simple solution.

Unappealing options abound

Unsecured business loans are a genuine alternative for small business. Borrowing from family and friends comes with the inherent risk of damaging personal relationships. Crowd-sourcing doesnt suit every type of business and can be an administrative nightmare. Using your credit card means paying high interest rates and not always being able to access sufficient funds. Drawing on the security of an asset like the family home is often not an option, especially for younger business owners without a family home or unwilling to risk the house.

There is another option

Unsecured business loans offer just that - an unsecured business loan of between $5 and $250,000 to help small businesses grow. Accessing a smart proprietary lending platform, we evaluate the strength of your business to determine creditworthiness, not your personal credit score. You can apply online in a few minutes, and have the funds in your bank account within 24 hours. Common uses include bridging receivables gaps, purchasing inventory, building a new website, hiring more staff, renovating or expanding premises, purchasing equipment or paying ATO tax portal debt (some parameters apply).

How does an unsecured small business loan work?

An unsecured small business loan usually works on a fixed term of between three and 12 months and suits businesses with regular income. No security is required, but you do need income of more than $5,000 per month and six to 12 months of trading history. For loans under $50,000 you only need a photo ID and three months of bank statements. For loans over $50,000 you would also need to provide current account receivables, payables and other basic financials.

Unsecured small business loans don't use annual interest rates because the loan terms are usually less than 12 months. Instead, a factor rate is applied depending on credit quality and term.

Don't stay frustrated or use a less-than-perfect option - unsecured business loans can help you grow your small business.