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PayPal (PYPL) Supports Small Businesses With PPP Acceptance

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PayPal Holdings, Inc. (PYPL - Free Report) has started accepting applications for small business loans through the Paycheck Protection Program (“PPP”) of the U.S. Small Business Administration.

This is in sync with its strategies to gain solid traction in the second round of stimulus payments in the United States.

We believe that the company is expected to witness a boost in its clientele on the back of wide acceptance of loan applications during the ongoing pandemic situation, which has caused disruptions to several small businesses globally.

These disruptions, in turn, are resulting in a spike in loan applications generated by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

PayPal, under the act, will help in the seamless distribution of funds to the coronavirus-impacted businesses, which is a major positive.

Motive Behind PPP Acceptance

The latest move bodes well for PayPal’s strong efforts to help the society in combating the coronavirus-led financial disruptions.

Moreover, it is in sync with the company’s growing endeavors to deliver enhanced customer experience via its innovative products and services.

We believe the move will drive the company’s momentum across the small businesses further.

In April 2020, it facilitated PPP loans to more than 75,000 businesses, with an average loan size of $28,000.

Further, the company aided small businesses by processing more than 75% of loans worth below $25,000.

Recent Initiatives

The latest move adds to the recent initiatives of the company in the second round of stimulus payments.

Recently, the company rolled out Cash a Check feature in the Venmo app for select customers. This will likely enable them to cash their government stimulus paper check quickly and securely via the Venmo app.

Using the feature, select customers will have their stimulus checks sent directly into their Venmo account.

Additionally, the company waived the cash-a-check feature’s check-cashing fees for government stimulus paper check recipients.

We believe all these endeavors are expected to provide PayPal with a competitive edge against its strongest peer Square (SQ - Free Report) .

Zacks Rank & Stocks to Consider

Currently, PayPal carries a Zacks Rank #3 (Hold).

Some other top-ranked stocks in the broader technology sector are TE Connectivity Ltd. (TEL - Free Report) and Garmin Ltd. (GRMN - Free Report) . Both companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for TE Connectivity and Garmin are currently pegged at 10.41% and 6.8%, respectively.

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TE Connectivity Ltd. (TEL) - free report >>

Garmin Ltd. (GRMN) - free report >>

PayPal Holdings, Inc. (PYPL) - free report >>

Square, Inc. (SQ) - free report >>