PayPal has submitted an application in the US to establish a new bank that would provide lending services and savings accounts.

The company said that PayPal Bank would enable it to provide business lending solutions more efficiently to small businesses in the US while reducing reliance on third parties and strengthening its business.

In addition to providing small business lending products, PayPal said it will offer customers interest-bearing savings accounts.

If approved, PayPal Bank would also establish relationships with card networks to complement processing and settlement activities through existing banking relationships.

The application was submitted to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish PayPal Bank, a proposed Utah-chartered industrial loan company.

The payments company said that since 2013, PayPal has provided access to over $30 billion in loans and working capital to more than 420,000 business accounts worldwide

It claims its services fill a “a critical gap” for small businesses seeking capital to expand, buy inventory, or invest in the tools and people they need to do business.

If PayPal receives a US banking licence, customer deposits will be eligible for FDIC insurance coverage.

The company has chosen Mara McNeill as PayPal Bank's president as she has over 25 years of financial services experience in banking, commercial lending, and private equity.
Before joining PayPal, she served as president and chief executive of Toyota Financial Savings Bank.

"Securing capital remains a significant hurdle for small businesses striving to grow and scale," said Alex Chriss, president and chief executive officer of PayPal. "Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the US."

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