PayPal (NASDAQ: PYPL) has just announced a new feature called Funds Now. As the name implies, it allows select businesses the ability to access the funds from completed sales right away.
By eliminating the holds, delays, and reserves, PayPal gives small businesses the cash flow they need to keep their operations going without having to wait.
PayPal Funds Now Program
The Funds Now program has been extended to small businesses in good standing at no extra cost, which now makes up more than one million companies.
Cash flow is a pressing issue for small business owners. With accounts receivables taking days or even weeks by some organizations, near instant availability can solve this problem.
On the company blog, PayPal Chief Operating Officer Bill Ready explained how getting rid of this particular pain point came about after hearing small businesses concerns regarding this issue. According to Ready, businesses said it was “Too difficult and too slow to get access to the funds from their completed sales.”
Ready added, “In the world of payments, funding delays of seven to 21 days for small businesses have been far too common. Those funding delays hinder the ability of small businesses to invest back into their businesses, pay their bills, and serve their customers.”
PayPal currently has more than 17 million businesses using its platform to process payments. The vast majority are small businesses looking to collect on the sales they make as soon as possible.
Any delays on their ability to collect on these funds can translate to everything from inventory shortage to payroll problems.
Funds Now
In order to qualify for Funds Now, businesses need 6 plus months of PayPal business account sales history, strong selling history with successful PayPal transactions, and a confirmed account information to keep your account secure.
With these requirements in place, the system essentially is automated. Anytime you make a sale through a marketplace, website, PayPal Here, or invoicing via PayPal, the money will be sent directly to your PayPal balance within seconds.
You can then transfer the funds to your bank account or use it from your PayPal balance.
The only time there may be a delay is if PayPal suspects the payment you received comes from a fraudulent buyer. In that case, the company said it will help you resolve the problem.
Funds Now is being rolled out to select businesses across the US, UK, and Australia. PayPal said it is going to expand the program to more businesses and more markets in the near future.
Image: PayPal