PayPal Holdings (PYPL) said the fintech company was one of the first non-banking institutions to get the approval to provide lending to small businesses under the U.S. government’s $350 billion emergency rescue program.
After receiving approval by the U.S. Small Business Administration to take part in the Paycheck Protection Plan, PayPal can now directly join the program without having to partner with a traditional bank.
The U.S. government’s $350 billion relief package allows ailing small businesses hurt by the coronavirus pandemic to apply for government-guaranteed loans with participating lenders. Those loans will be forgiven if they are largely used to cover payroll costs.
“There is an urgent need to help every qualified business access the funding needed to ensure that as many workers as possible keep their benefits and paychecks. This is a race to save jobs in the present and for the future,” said Dan Schulman, PayPal’s President and CEO. “We are eager to deploy our capital and expertise to do our part in helping small businesses survive this challenging period.”
Last month, five-star analyst Dan Dolev at Macquarie initiated PayPal coverage with a Buy rating and a $122 price target.
“When the virus dust settles, long-term growth potential will be back in fashion. With top network density, our e-comm checkout survey is showing better usage trends vs. Apple, Google Pay,” according to Dolev.
Turning to the rest of the analyst community, the bulls are in the majority. With 20 Buys and 2 Holds, the word on the Street is that PayPal is a Strong Buy. The $125.89 average price target implies that shares could surge 19% in the next 12 months. (See PayPal stock analysis on TipRanks)
Last week, PayPal announced a set of easing measures, such as waiving certain fees and deferring repayments on business loans, in an effort to help businesses affected by the coronavirus pandemic. PayPal said it has provided access to more than 900,000 loans and cash advances, enabling $15 billion in funding to more than 305,000 small businesses.