PayPal is acquiring Swift Financial to expand lending business

Payments firm, PayPal is acquiring online lending company Swift Financial aimed at expanding its business that provides working capital to merchants. Financial terms of the deal were not disclosed.

PayPal said the acquisition is to increase small business owners access to capital with loans of up to $500,000 and better provide credit to merchants who aren't yet using its services. The company launched its first Working Capital product for businesses back in 2013, and since then has seen competitors like Square and Kabbage emerge with their own offerings of credit lines for small business customers.

"We know and value Swift's technology platform and people, and we believe their talent and capabilities will further strengthen our overall merchant value proposition," PayPal said in a statement announcing the acquisition. "Building upon an existing commercial relationship, the acquisition of Swift Financial will enable us to better serve small businesses by enhancing our underwriting capabilities to provide access to affordable business financing solutions to more businesses to help them grow and thrive."

Swift Financial was founded in 2006 and has since provided funding to more than 20,000 small businesses.

PayPal said the Swift acquisition is expected to close later in the year "subject to certain closing conditions, including the expiration or early termination of the applicable pre-merger waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976."