The e-commerce giant eBay has announced the launch of a loan service for small firms that will provide them with financing of up to a maximum of £1 million.

Around 300,000 small businesses use eBay to sell their products and the company is stating that this new service will help them as they look to recover from the COVID-19 crisis. Businesses applying for one of the loans will be able to get the money within the same day, and the amounts that they can apply for range from just £500 all the way to £1 million.

The decision to launch this service means that eBay is set to compete with PayPal, which has been offering small business loans for some time, as well as those banks that focus primarily on small business lending.

Given the wide range of loans, some business owners may seek advice from accountants in Goole or whatever region they are based in before they decide how much to borrow.

Research into the finances of UK small firms following the pandemic supports the claims by eBay that the loans are needed, as it has shown that close to a third of them are within one month of collapse. Furthermore, two out of every five have been unable to get bank credit, and one out of every three has been denied access to the COVID-19 loans provided by the government.

The service is being called Capital for eBay Business Sellers (CEBS), and the first company to sign up as a funding partner is YouLend.