Stripe Capital • Hacker News Board

Re: Stripe Capital

#11

Post by atourgates » Thu, Sep 05, 2019, 5:29 PM UTC

jonknee wrote: post #3

Here's a twitter thread from John Collison detailing why they launched this. It sounds pretty innovative (not exactly a surprise considering it's Stripe!). https://twitter.com/collision/status/1169660488374001664 > Since 2008, loans made to small businesses have decreased in absolute terms by 41%. Banks have been pulling back from SMB lending. > When businesses can get a bank loan, they spend an average of 25 hours o…

Based on the amount of junkmail I get offering my small business loans, I have a hard time believing the "filling a niche no-one else is offering" narrative.

We get about 2x mailers per week from AMEX alone offering business loans of up to $500k, not to mention the many other offers we get less frequently.

I like Stripe and think the offer a great product, but I don't think they're doing this because no-one else will.

Even this specific type of loan, called a "Merchant Chash Advance" - exists, and isn't anything new: https://www.fundera.com/business-loans/merchant-cash-advance

Re: Stripe Capital

#12

Post by aznpwnzor » Thu, Sep 05, 2019, 5:29 PM UTC

it's smart because they already have cash flow insights and also control your revenue stream.

but i wonder how this nets out in terms of:

1. do i want the entity holding my loan to also control my billing/revenue management?

2. aren't smb rates much lower than this usually? so crazy that certain usurious rates are just explicitly allowed

Re: Stripe Capital

#13

Post by paggle » Thu, Sep 05, 2019, 5:29 PM UTC

What a fucking amazing company. The biggest challenge in making a loan is getting repaid. When you control the vehicle by which your debtor gets paid by their customers, you can easily and frictionlessly take your repayment without having to make calls and send increasingly agitated letters. Genius

Re: Stripe Capital

#14

Post by Veelox » Thu, Sep 05, 2019, 5:30 PM UTC

klinskyc wrote: post #8

Veelox wrote: post #6

The FAQ button goes to https://stripe.com/docs/capital/faqs which currently 404s for me.

It should be https://stripe.com/docs/advance/faqs

That also 404s for me...

Re: Stripe Capital

#15

Post by edwinwee » Thu, Sep 05, 2019, 5:31 PM UTC

Veelox wrote: post #6

The FAQ button goes to https://stripe.com/docs/capital/faqs which currently 404s for me.

It's up now! (Sorry about that.)

Re: Stripe Capital

#16

Post by jonknee » Thu, Sep 05, 2019, 5:34 PM UTC

qrazhan wrote: post #7

jonknee wrote: post #3

Here's a twitter thread from John Collison detailing why they launched this. It sounds pretty innovative (not exactly a surprise considering it's Stripe!). https://twitter.com/collision/status/1169660488374001664 > Since 2008, loans made to small businesses have decreased in absolute terms by 41%. Banks have been pulling back from SMB lending. > When businesses can get a bank loan, they spend an average of 25 hours o…

Square and PayPal both have similar offerings, which piece here do you feel is innovative? (disclosure: I work at Square, but not on Capital.)

No application and approval process?

Re: Stripe Capital

#17

Post by brianpgordon » Thu, Sep 05, 2019, 5:36 PM UTC

aznpwnzor wrote: post #12

it's smart because they already have cash flow insights and also control your revenue stream. but i wonder how this nets out in terms of: 1. do i want the entity holding my loan to also control my billing/revenue management? 2. aren't smb rates much lower than this usually? so crazy that certain usurious rates are just explicitly allowed

The rates don't seem extraordinarily high to me. What would you consider reasonable? It's not trivial to get an apples-to-apples comparison since loan rates are usually given as an APR, not a flat fee. Also, don't confuse their "% of sales to loan repayment" number with a rate - that just determines how much of your revenue they hold back until the loan is repaid.

Re: Stripe Capital

#18

Post by asdf21 » Thu, Sep 05, 2019, 5:36 PM UTC

atourgates wrote: post #11

jonknee wrote: post #3

Here's a twitter thread from John Collison detailing why they launched this. It sounds pretty innovative (not exactly a surprise considering it's Stripe!). https://twitter.com/collision/status/1169660488374001664 > Since 2008, loans made to small businesses have decreased in absolute terms by 41%. Banks have been pulling back from SMB lending. > When businesses can get a bank loan, they spend an average of 25 hours o…

Based on the amount of junkmail I get offering my small business loans, I have a hard time believing the "filling a niche no-one else is offering" narrative. We get about 2x mailers per week from AMEX alone offering business loans of up to $500k, not to mention the many other offers we get less frequently. I like Stripe and think the offer a great product, but I don't think they're doing this because no-one else will…

Have you actually tried to qualify though?

Re: Stripe Capital

#19

Post by codemati » Thu, Sep 05, 2019, 5:36 PM UTC

jonknee wrote: post #16

qrazhan wrote: post #7

Earlier quoted context omitted.

Square and PayPal both have similar offerings, which piece here do you feel is innovative? (disclosure: I work at Square, but not on Capital.)

No application and approval process?

(disclosure: I work at Square but not on Capital)

Square Capital takes only a few clicks to sign up, and loan offers automatically show up if you're already eligible [1], so this part of the offering is quite similar.

https://squareup.com/us/en/capital

Re: Stripe Capital

#20

Post by ericjang » Thu, Sep 05, 2019, 5:37 PM UTC

I've probably missed something, but for how long does the borrower have to pay 9% of their sales? Is the debt paid in full once $15k (+interest?) is paid back? What is that interest rate?