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PayPal's Small Business Lending Program Expands More than 20,000 businesses have borrowed more than $150 million in PayPal Working Capital loans since the pilot program launched in September.

By Laura Entis

Opinions expressed by Entrepreneur contributors are their own.

PayPal is putting more power behind its credit business.

Today, the company announced that its Bill Me Later credit-line program will now be called PayPal Credit. In addition, the company said it will continue to expand Working Capital, its small-business lending program, which launched last September.

So far, more than 20,000 businesses have borrowed over $150 million with Working Capital. Currently, businesses borrow over $1 million in loans a day through the program. Both programs are to expand internationally. PayPal Credit will soon be available in the U.K. and Germany, while PayPal Working Capital will launch in the U.K. and Australia by the end of this year.

Related: GoDaddy Launches 'Get Paid,' a New Payment Processing Tool for Small Businesses

"We are bringing credit to the center of PayPal," Steve Allocca, PayPal's head of global sales, said at a press conference today. "We view credit as a tool to help our buyers pay more conveniently, and a tool to help our sellers sell more…it drives volume."

For Jack Murray, the owner of Austin-based Jack & Adam's bicycle shop, who attended today's press event, PayPal credit provides a way for his store to easily finance larger purchase items – such as 'the rookie package,' which includes a bicycle, helmet, petal, shoes, an outfit, pump and retails for $999 -- and market them as such. He estimates that he has done $250,000 in sales of bicycle-specific financing this year alone.

While PayPal Credit makes it easier for customers to spend, PayPal's Working Capital program makes it easier for small businesses to take out a working loan quickly, potentially within minutes. The program, while expanding, is still being tested and remains invite-only. (To be eligible, a merchant must do more than $20,000 in sales on PayPal in over a 12-month period.)

Clients are charged a flat fee, and loans aren't repaid through monthly installments; instead, PayPal deducts a percentage, which ranges from 10 to 30 percent, of a business's daily sales. (The higher the percentage deducted, the lower the fee).

Related: Accepting Credit Cards and PayPal on Your eCommerce Site

The maximum loan amount has increased from $20,000 to $60,000, said Darrell Esch, PayPal's vice president of small business lending.

Steve Contratto, a merchant in San Jose, Calif., who sells new and used electronics primarily through eBay and Amazon, has taken out three Working Capital loans since the program launched in September. "As fast as I can pay one off, I take out the next one," he said at the event today, crediting the loans for his company's continued expansion and growth rate. (This year, he estimates he's on target to do $1 million in sales, and revenue is up 15 percent since this time last year.) In December, he took out a substantial loan to increase his inventory in time for the holiday rush and saw his sales double.

Sixty percent of Working Capital loans go to eBay sellers like Contratto, Esch said, and they primarily use the money to increase their inventory, while non-eBay sellers typically use loans for business expansion.

Related: Twitter Train Wreck: Why We Can't Turn Away From PayPal Exec's Shocking Meltdown

Laura Entis is a reporter for Fortune.com's Venture section.

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