Platforms such as PayPal, Shopify and Block have been building out merchant cash advances and other business lending operations.

A dive into these firms’ quarterly filings reveals the demand by enterprise clients on their platform for alternative forms of financing.

PYMNTS Intelligence has long chronicled the challenges facing smaller firms navigating the storms of economic volatility. Capital, of course, offers up a buffer against the turbulence, and capital can be hard to come by.

As a result, and as tariffs started to take root this spring, PYMNTS Intelligence found that across 560 firms surveyed, a minority, at 36%, had access to readily available cash, including another 8% that also had cash in the bank. As a result, 1 in 5 firms said they might not be able to survive tariffs.

Perhaps it’s no wonder, then, that they are looking beyond traditional banks, and especially larger financial institutions (FIs), to gain access to the capital they need to expand, or simply keep the status quo. PYMNTS and Visa found in a survey that 37% of small and medium-sized businesses (SMBs) indicate that they’d be "highly interested" in switching to embedded lending options, which offers online platforms a significant market.

In March, PayPal said it had passed a cumulative $30 billion in global loan originations for small businesses, marking 12 years of that activity.

As CEO Alex Chriss said during the most recent earnings call with analysts, "we are capitalizing on untapped opportunities … in SMB." CFO Jamie Miller noted on the call that PayPal’s value-added services revenue grew 16% to $847 million, driven in part by strong performance in merchant credit.

PayPal’s Working Capital and Business Loan Growth
The company’s 10-Q filing with the Securities and Exchange Commission (SEC) indicates that for the merchant lending offerings, which include PayPal Business Loan and PayPal Working Capital, demand grew. During the six months ended June 30, 2025 and 2024, the company purchased approximately $1 billion and $774 million in merchant receivables. The data show that about 89.9% of the loans were current as of the latest period in June, down a bit from 90.4% at the end of last year.

The total outstanding in its merchant loan book stood at $1.7 billion in June, up from $1.5 billion at the end of the year — and 41% higher than a year ago. The company said in the filing that the increase was "due primarily to growth of approximately $260 million in our PayPal Working Capital product portfolio, primarily from Germany, the U.S., and the U.K. and growth of approximately $230 million in our PayPal Business Loans product in the U.S." 

In Block’s case, 10-Q filings indicate that Square Loans, its commercial loans on the company’s balance sheet were $631.3 million, compared to $404.8 million at the end of last year.

Shopify’s filings disclosed that its loans and merchant cash advances, originated by its banking partner, grew. The filings note that in the quarter, the company purchased $1 billion in loans, up from the $705 million seen in the previous year’s second quarter.

LendingClub’s 10-Q showed that loans held by LendingClub Bank, which includes (but is not limited to) loans extended to businesses, held $5.3 billion in loans, up 15% year over year. And as the company wrote in that filing, "in addition to the loans serviced on our marketplace platform, we serviced $52.8 million, $93.1 million and $111.6 million in outstanding principal balance of commercial loans sold as of June 30, 2025, March 31, 2025 and June 30, 2024, respectively."

Platforms Lure SMBs Seeking Capital From Alternative Lending Options

The article discusses how platforms like PayPal, Shopify, and Block are expanding their lending services for small and medium-sized businesses (SMBs) amid economic challenges. These platforms are offering alternative financing options to help SMBs navigate tariffs and financial volatility, with PayPal reporting $30 billion in global loan originations and significant growth in its merchant lending products.