Payment processor PayPal is offering working capital to small business customers in the UK for a one-time fee, as the company expands its online loans market.

PayPal, owned by eBay, has expanded its working capital service to the UK after successfully testing it in the US, where it launched the service in September 2013.

It will be open for PayPal's business customers, including those on eBay platform, from autumn. The company intends to lend up to 8% of what a merchant typically makes on the PayPal platform.

The cash advance is secured against future sales of the business, and businesses have to repay the amount with a share of their daily PayPal sales. No credit cheques are required for the service as it does not amount to a loan.

It would be available to customers within minutes of filing an online application, and the company is not charging any interest or late payment fees.

The company noted that the service would help small businesses, given the "long-standing challenges in accessing bank and equity finance".

"Small businesses are the lifeblood of the British economy. But seven years after the start of the credit crunch, many of them are still struggling to get funding," said Cameron McLean, managing director of Paypal UK.

"According to the British Government, around a third of SMEs rely on retained earnings or the owner's own finances rather than bank or equity funding. This means that many find it very difficult to finance their present needs or future growth and the problem is acute for smaller, online businesses."

"PayPal is well placed to make a difference ... and we're delighted that our UK customers will be next to benefit from faster, fairer funding."

In the US, PayPal has provided $140m (£82m, €104m) to small and medium-sized enterprises (SMEs) since it began the service.

PayPal, which is expected to overtake parent company eBay, in terms of revenues, has been widening its service offerings with a view to increase its margins and attract more companies to its platform.