Intuit Powering SMBs | PayPal, Block Earnings Analysis | Wayflyer $5B milestone | More

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2 days ago
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Paypal and Block Earnings Analysis

PayPal and Block have each built formidable fintech lending operations, but Q1 2025 highlights a divergence in their recent trajectories. PayPal, after years of rapid growth in merchant lending, took a breather to refine its approach – and is now tiptoeing back into expansion with a focus on quality over quantity. Its commentary and metrics suggest a healthier portfolio and a deliberate strategy to support merchants’ financing needs without incurring outsized risk. The company is sending a message that it will grow this business line on its own terms: leveraging its data advantages and customer relationships, but being ready to pump the brakes if the economic climate worsens.

Block, meanwhile, has been in growth mode, using its ecosystem leverage to become a leading small-business lender while mostly sidestepping the balance-sheet risks. By innovating in underwriting and funding, Block has managed to scale up lending quickly (even outpacing some large banks in the under-$250k loan segment) and still report loss rates that rival those of far more conservative lenders. The Q1 2025 results of $1.59B in originations show Block’s confidence in its credit engine – it’s investing in new lending products and greater scale (especially in consumer micro-lending via Cash App) because it sees strong unit economics and low default rates as validation. Block’s challenge ahead will be maintaining that credit performance as it reaches more borrowers and as macroeconomic variables shift.

While no one was looking, Intuit has built a fintech empire

From Tearsheet: 'Behind the scenes, Intuit is doing what many seasoned companies with established customer bases aim to do: build out an end-to-end ecosystem so sticky and essential that customers don’t want — or need — to leave.

The firm is likely on that trajectory, making a shift from that tax company into something more expansive: a full-spectrum financial operating system. And it’s doing that through carefully chosen, strategic acquisitions.

The acquisition spree: In April, Intuit announced plans to acquire Deserve, a mobile-first credit card platform, and also signed an agreement to acquire HR platform GoCo. The press releases were tidy, but the impact of these moves is anything but small.

They signal a clear thesis: Intuit is doubling down on owning more of the financial lifecycle, especially for small to midsize businesses (SMBs), where it already holds a strong foothold with QuickBooks. But instead of reinventing the wheel, it’s opting to buy the ones that are already spinning efficiently.'

In FY24, QuickBooks Capital facilitated $2.4 billion in loans, marking a 28% year-over-year increase. Intuit holds a sizable portion of these loans on its balance sheet, originating both directly and through loan purchases from partners. As of fiscal year-end, net notes receivable for term loans stood at $912 million, up 20% YoY. This balance rose to $1.2 billion by Q2 FY25, up 31.6%, and now accounts for approximately 15% of Intuit’s tangible assets.

It’s important to note that these are unsecured loans that expose Intuit to potential credit losses in the event of a downturn. This risk is heightened by current trade policies, where tariffs fuel recession concerns. Small businesses, which are Intuit’s core lending base, are typically more vulnerable than large enterprises during economic stress, making this segment particularly exposed.

Key Highlights from Wayflyer's $5B Milestone

One thing that stood out from the article recently by Fintech Nexus about Wayflyer is that people continue to say on a global level that 'major banks pulling back' presents an opportunity for other lenders to fill the gap in the SMB lending market. This honestly has been said countless times since the financial crisis of 2008-09.

Why is that? A simple reason is that it's true in part because of the demand that's there, and also because technology outside of traditional banks is moving and able to fix the problems more quickly and better serve SMBs.

Here are a few key points from the article:

1. Strategic Expansion Beyond E-commerce

Initially focusing on e-commerce businesses, Wayflyer has expanded its services to include companies that sell through third-party retailers and across multiple platforms. This strategic move allows Wayflyer to tap into a broader market of small businesses seeking flexible financing solutions.

2. Filling the Gap Left by Traditional Banks

Wayflyer's growth is partly attributed to the withdrawal of major banks from small business lending. For instance, in Q1 of the previous year, JPMorgan Chase originated approximately $1.2 billion in small business loans, while Wayflyer deployed about $400 million—a significant figure for a fintech company.

3. Innovative Financing Model

Wayflyer's financing model involves structured partnerships with major banks like JPMorgan Chase, which provide a significant portion of the capital Wayflyer deploys. This model allows Wayflyer to offer fast, flexible, non-dilutive funding to small businesses, particularly in the e-commerce sector.

4. Global Presence and Recognition

With operations in 11 countries and offices in Dublin, London, New York, and Sydney, Wayflyer has established a strong global presence. The company was recognized as Ireland's fastest-growing technology company in Deloitte's annual ranking in November 2024