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Stripe Capital

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Re: Stripe Capital

#31

Post by adamqureshi »

Stripe offered my 1 man shop a cash advance.

$12,500 $1,250 Fixed fee then 10% of sales withheld.

$18,500. $1,850 Fixed Fee. 14% of sales withheld.

$25,000.00 $2,500 fixed fee. 20% of sales withheld.

terms: No lengthy application: You’re pre-qualified for your advance—no time-consuming application process required. No hidden fees: We charge one fixed fee for the advance—there are no interest charges or late fees. Pay when you get paid: Stripe withholds a set percentage of your daily sales until the total amount owed is paid down, so your daily payment adjusts to your performance.

Re: Stripe Capital

#32

Post by thiscatis »

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…

Innovative? Do a quick google search for POS Lending ;). This is a standard offering for most financial institutions that do merchant acquiring. But I'm sure Stripe will greatly improve the experience.

Re: Stripe Capital

#33

Post by frakkingcylons »

ericjang wrote: post #20

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?

There is no interest, you just have to pay back the fixed fee.

Re: Stripe Capital

#34

Post by abalone »

Stripe is really coming after Square. Square Capital is an extremely similar product (prequalifies you & autopays based on your payment volume).

Square has a platform / payments SDK but if you look at the Github repo it's a disorganized mess versus Stripe's with virtually no "stars".[1] There's also Stripe Terminal which is a platform-y approach to Square's register/terminal. I wonder how much longer until they go after Square's cash app.

[1] https://github.com/square https://github.com/stripe

Re: Stripe Capital

#35

Post by ralusek »

So am I understanding this correctly?

It is a fixed 10% fee, irrespective of the payment schedule. And then the payment schedule is simply taken as ~12%(increasing as the amount loaned increases) of transactions processed through Stripe until 110% of the loaned amount has been deducted?

Re: Stripe Capital

#37

Post by abalone »

harshadante wrote: post #27
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.)

Harsha from Stripe Capital here. A ton of entities supply capital to businesses today -- it's one of the largest markets in the world. We aren't trying to beat anyone else. We're just responding to the need we heard from Stripe users for a product like this. I think how we do it (in terms of how we model the risk profiles of nascent, capital-light internet business; how we present it to customers; etc.) is all pretty…

This doesn't answer the question. That is exactly what Square Capital does (perhaps PayPal too).

Re: Stripe Capital

#38

Post by rogerkirkness »

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…

Shopify, Amazon, Paypal, Alibaba all have similar concepts.

Re: Stripe Capital

#39

Post by AdamSC1 »

jawns wrote: post #25

The way Stripe Capital has structured repayment of the loan -- fixed fee, dynamic loan term -- is is an interesting way to make it hard to compare against other lenders, which typical express their fees through APRs. The term of the loan is variable, and depends on daily sales, but assuming you have a high volume of sales and take out a small loan, the effective APR is going to be through the roof! For instance, supp…

It seems a bit as though the model is set up for independent operators and 'Mum & Pop' shops that use Stripe but don't have the business acumen to see the issue.

Or, people who have a good history of selling with Stripe, but, lack the credit rating, history or collateral to use other lenders.

It's a very carefully and cleverly thought out payment model, which leads me to believe they knew exactly which consumer base they were going after.

Re: Stripe Capital

#40

Post by [deleted] »

jawns wrote: post #25

The way Stripe Capital has structured repayment of the loan -- fixed fee, dynamic loan term -- is is an interesting way to make it hard to compare against other lenders, which typical express their fees through APRs. The term of the loan is variable, and depends on daily sales, but assuming you have a high volume of sales and take out a small loan, the effective APR is going to be through the roof! For instance, supp…

[deleted]
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