121–130 of 283 posts
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 af…
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You didn't include the fee in the payback, and you are confusing monthly with annual interest rates
Is the fee not charged upfront - that's why I excluded it from the payback period. Ahh you caught the mistake with the interest periods! Thanks!
How does that make any sense?
My company was auto-enrolled in the Stripe Capital beta some weeks/months ago (not sure when). I never accepted the money. Here's what they offered: $12,500 advance; $1,250 fixed fee; 3.8% of sales towards repayment. $18,500 advance; $1,850 fixed fee; 5.6% of sales towards repayment. $25,000 advance; $2,500 fixed fee; 7.6% of sales towards repayment. My company grossed $45,600 MRR this August. I love Stripe and swear…
I'm not really sure what their rates look like for smaller accounts, but I feel like the target audience is one person startups and such, who have some income from their hobby (let's say 1k a month) and want to grow to a full-time job.
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Is the fee not charged upfront - that's why I excluded it from the payback period. Ahh you caught the mistake with the interest periods! Thanks!
>Is the fee not charged upfront How does that make any sense?
But you're probably right in this case - Stripe likely include their fee in the monthly payments - updated the sheet.
Appreciate the feedback!
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…
[Stripe cofounder.] > But one thing strikes me as odd about this whole arrangement. The better a business performs, the quicker it is able to repay the loan, and the higher its effective APR becomes! It's essentially a prepayment penalty in disguise. So you'd better make sure the loan doesn't help your business too much, or you'll end up getting hosed by the loan fee. Yes, this is right -- if your business suddenly s…
* What does the entry level look like? This appears to be a decent way to launch a hobby into a business, but what is the income you're looking for? Does my app need to gross 1k/mo before it's an option?
* What are the term limits? Or what if the app is shutdown, or underperforms?
This appears to be a good way for people to launch hobby projects into full businesses, I was just wondering if that was indeed the case.
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Harsha from the Stripe Capital team here. We’ve designed the program so that most offers take about 8-12 months to pay back, and therefore the repayment rate would change to reflect that projected duration (which would ultimately impact the APR). The 15% repayment rate you see on the landing page is just an example. We do think this is a significantly improved overall user experience—it works straight out of your Str…
> about 8-12 months to pay back Wow, that's a whopping 10-15% p.a. interest rate. Time to mint the money has come for Stripe, yeah?
I didn't read the exact terms, but based on the landing page it seems like your downside is capped, which is a big thing. I.e. if you suddenly stop making sales, you don't repay them . (not sure if there's a clause that makes you repay if you never make sales for a couple of years after taking out the loan)
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In this case, then surely showing a calculator straight on the page allowing people to see what APR they would get based on their payment/sales configuration would make the whole process more transparent and easier to understand by people who might not be savvy enough to understand the nuances then?
I have worked in the small business lending space before. Stripe cannot price in terms of APR because legally, it is not a "loan". It's a purchase of future receivables. If it was a loan, the APR would be considered usurious in most states.
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…
Peter Thiel made an interesting point RE: one structural problem in the US economy being that lenders are giving consumers too much credit, but small businesses not enough.