Digital payments company, PayPal, has introduced Working Capital, a new loan product which promises eligible merchants a tailored grant loan within minutes of request.

Australia is the first market outside the United States to receive the service. It will be introduced to a limited number of partners to begin, before a broader rollout commencing 2015.

PayPal customer experience and solutions director, Kareem Al-Bassam, said the nation was chosen due to demand from small- to medium-sized businesses (SMBs) for wider choice of financing options.

SMBs which require the service must complete a four-step application process; eligibility can be checked by PayPal merchants which have held an account for at least 12 months via the provider's web site.

Those that qualify are then able to select the amount of the loan (up to eight per cent of their annual PayPal sales), and what percentage of each PayPal-facilitated transaction will be allocated to repay the grant.

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Borrowers are required to pay one competitive fee which is decided up front, and based on the amount borrowed.

PayPal said there are no hidden charges, nor penalties for late payment or early settlement of the full loan.

"Working Capital is ideal for SMB owners who need fast, simple and flexible solutions to fund activities, like staffing up ahead of seasonal demand or buying additional inventory to meet orders," Al-Bassam said.

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