In an announcement made public on August 5, eBay announced that the online marketplace is partnering with LendingPoint, the Atlanta-area platform that rapidly originates unsecured loans to merchants and service providers using data and code, to provide installment loans to eBay sellers wanting to sustain or simply grow their businesses.
The funding access pilot program, available now to a select group of U.S.-based sellers but with wider availability later this year, is called eBay Seller Capital powered by LendingPoint. Not only is it intended to provide financing opportunities, but it is touted by both companies for its speed and transparency.
According to a statement from eBay, the program will be offered with flexible terms. Borrowers will have as long as 48 months to select options for their needs, and repayment plans for their budgets, without the burden of origination fees or early payback fees. While the program is in pilot mode, eligible sellers could receive as much as $25,000 in funding in 24 hours.
“The flow of money is going more and more e-commerce,” LendingPoint CEO and co-founder Tom Burnside said about small business lending in an interview with Hypepotamus. “It’s a very natural solution for us.”
Although LendingPoint is relatively new (the company recently turned six years old), Burnside says the company’s leadership team have been in the business for a long-enough time to really understand the space. He says there are two sides to eBay’s seller economy. One is the “gig” side, where selling products is more of a side job. The other is the seller who makes these transactions their actual job. “We can help both of those populations very well,” he says.
“A large percentage of our current transactions are 1099s — people who do that second hustle,” Burnside added. “We know how to identify how to get them money; we’ve been doing that for a while anyway. This is a very natural extension and it fits really well with what’s going on in the economy and the flow of money.”
Burnside says he has a brother on the “gig” side of eBay selling, which has given him insight into the goals of these small business owners, and how the metaphor of planting a seed and watching it grow applies to eBay sellers just as it does elsewhere in entrepreneurship. He says eBay Seller Capital powered by LendingPoint can play a big role in such expansion, whether it’s helping to meet the costs of getting established, being able to take advantage of supply chain opportunities such as attractive bulk purchasing, or other ways that funding limitations can hinder growth.
He says LendingPoint can decide whether or not to lend to an eBay seller in under six seconds, and can distribute the money to them on the same day.
Burnside also says the lack of information in small business lending has made for a process he describes as “clunky.” Having access to eBay’s flow of information, now coupled with LendingPoint systems’ ability to make quick decisions by design, is what he believes will improve the experience of getting working capital.
“The thing is, the amount of information they have, when you think about the information eBay can share to help us make a good quality decision for a seller, was second-to-none. We’re really excited about that.”
As the partnership develops, the two companies plan to provide eBay sellers with more tools to run their businesses, and more capital. At some point, they plan to make as much as $500,000 in capital available to eligible applicants.
“We’re committed to empowering entrepreneurs to make their dreams a reality, and we are continuing to partner with our sellers to provide them with the tools they need to thrive,” said eBay’s VP of Global Payments Alyssa Cutright in a statement sent to Hypepotamus.
“We’re excited to make flexible financing options available that are integrated with our new payments experience. The program with LendingPoint will enable critical funding opportunities for eBay sellers, especially during this time of economic uncertainty.”
Visit LendingPoint’s website for more details.