PayPal Strikes Another Clever Deal
It was a bit unexpected when earlier this month PayPal Holdings (NASDAQ: PYPL) announced that it agreed to acquire privately-held Swift Financial. That's because PayPal isn't really a frequent buyer of assets. It has, however, proven that it's a smart deal-maker. This particular agreement is only the latest in a series of clever ones that it's closed.
Swift Financial provides working capital for small- and mid-sized businesses (SMBs). For such entities, the company says, "[t]he difficulty of getting a loan from a bank has not improved with the times -- the process remains long, labor intensive, and uncertain." It makes its money by offering more efficient solutions.
This should sound at least distantly familiar to PayPal shareholders. The company already has a division active in this segment, called, rather unimaginatively, PayPal Working Capital. Since PayPal created the unit in 2013, the company says, it's helped over 115,000 SMBs access a total of more than $3 billion in funding. Swift Financial is smaller, with $1.5 billion-plus in funding to date and a bit north of 20,000 customers.
Source: Fool.com
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