PayPal now offers YouLend term loans to German merchants

PayPal has added a fixed-term business loan from YouLend to its German financial services page. „Merchants can borrow between €1,000 and €1m for up to one year, with a single fixed fee, fixed weekly repayments and payout from the next working day.” – according to Embedded Finance Rewiew. YouLend arranges the loan and runs the application, while its sister company Banking Circle provides the money. PayPal has not announced the product, and its UK, French and Dutch pages do not list it.

By March 2025 PayPal had lent more than $30bn to over 420,000 business accounts worldwide. In Germany it now runs merchant lending in two ways. Its own product is Businesskredit (business loan with PayPal’s brand), which PayPal lends from its own Luxembourg banking licence. With the YouLend term loan, PayPal points the merchant to someone else’s product and earns a fee.

For the merchant, the two loans work quite differently. Businesskredit offers first loans of up to €250,000, decided on the merchant’s PayPal sales and account history, the kind of data no outside lender has. Merchants repay with a fixed share of those sales, so a slow month means a smaller repayment, as long as they meet a minimum every 90 days. The YouLend loan comes with a credit check, goes up to €1m and is repaid in the same amount every week, whatever the merchant sells.