PayPal Breaks Into Small Business Lending

Photograph by Kim Kulish/Corbis

Since bank lending to small business dried up in the aftermath of the financial crisis, a wealth of financing flavors for Main Street merchants has emerged. There are merchant cash advances, peer-to-peer lenders, and online term loans. There are more esoteric products, such as revenue-based lending, dynamic discounting, or industry specific factoring arrangements. What most of these models have in common: They’re more expensive than bank loans and their terms are harder to understand.

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