Small business confidence growing, PayPal reveals details of planned partnership with banks: Midday Roundup

Small business confidence growing, PayPal reveals details of planned partnership with banks: Midday Roundup

Confidence among small and medium businesses has bounced back strongly, according to the latest Sensis Business Index.

The report finds confidence levels among small and medium sized businesses is up 16 percentage points following a steep decline in the May survey.

Of the small businesses surveyed, 53% say they feel confident due to a solid customer base, good profitability and a strong pipeline, while 25% feel concerned because of too much competition. The remaining 22% feel neutral.

Despite this, small business approval for government policy has much to improve on. Nationally, only 24% of SMEs believe federal government policies are supportive of small businesses and 29% believe they work against the interests of the sector.

In the Northern Territory alone, 47% believe current government policies work against small businesses.

PayPal reveals details of planned partnership with banks

PayPal has recently begun making a transition from a business primarily reliant on eBay buyers and sellers to a financial institution more closely resembling a bank.

Chief executive Jeff Clementz confirmed, in a statement released today, the payment provider plans to partner with local banks to offer bigger loans to small businesses through its new working capital facility.

“There is a great opportunity for a PayPal-plus-bank partnership. PayPal could provide the online experience and the banks could provide the capital through their balance sheets,” Clementz said.

A partnership could be formed around small business loans between $6000 and $20,000 and would leverage PayPal’s data and the banks’ capital.

Despite banks’ domination of loans and deposits, Clementz says banks don’t have the ability to assess the risks of small businesses online that PayPal has built since it was founded in 1998.

“We have superior online payments risk capability,” he said. “We have 15 years’ experience of building algorithms on top of our ­systems, and neural networks and data management capabilities so that ­PayPal can exist.”

Aussie shares follow Wall St’s strong lead

Local shares have continued to lift this morning, following a very positive lead overnight from Wall Street.

“Sharemarkets in Europe and the US rallied strongly overnight, with gains of around 2% for major indices,” says Michael McCarthy, chief market strategist at CMC Markets.

“However, analysts are divided over the spur for the rallies. Some point to the potential for European stimulus, while others are looking to steady growth numbers from China. There is market evidence to support both hypotheses.”

The S&P/ASX200 benchmark was up 43.6 points to 5368.6 at 12:02pm AEDT. On Tuesday, the Dow ones closed 215.14 points up, rising 1.31% to 16,614.8.


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