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Stripe Capital

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Re: Stripe Capital

#131

Post by [deleted] »

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…

[deleted]

Re: Stripe Capital

#132

Post by pmart123 »

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…

Form my recollection, Square launched something very similar a few years ago?

Re: Stripe Capital

#133

Post by adamqureshi »

kraig wrote: post #75
adamqureshi wrote: post #31

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…

The hidden fee is baked into your % of sales withheld, unless you have extremely static income

I did not accept. I think i'll keep grinding without it. :-)

Re: Stripe Capital

#134

Post by dwild »

Meekro wrote: post #112

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…

> My company grossed $45,600 MRR this August. I love Stripe and swear by it, but I don't really understand why someone in my position would want this offer. The highest amount represents only about 17 days of revenue.

You offer a service I guess (the fact that you say MRR pretty much confirm this already)? This isn't for your kind of business, this is for the one that directly spends theses revenues once they are gained and could profit from economy of scale. Essentially this is for a shop that could save a bit by making bigger order and keeping an inventory.

Let say that you make in average 50k, but you spend 90% of that in operating cost... now making the same 25k would takes 5 months, not so good. Now let say that 50% of that cost is in buying the item you sell and that by buying a full month of that item instead of a few day at a time would give you a discount of 20%, that would means that after 2 months you would have paid back that fee and after 6.5 months your sales would all go back to you. A loan could do the same, but even in a bad month, you will still have the same amount to pay back... which can hurt quite a bit a company.

Re: Stripe Capital

#135

Post by robocat »

whatshisface wrote: post #92
eloff wrote: post #84

Earlier quoted context omitted.

But religion, unlike laws, thrives on technicalities. Some Jews won't push a button in an elevator on the Sabbath, but it's fine if its programmed to stop at every floor.

https://www.kosherswitch.com/live/tech/how

Wow: that is some tortured denial of cause and effect.

I am going to set up a switch that buys you a hamburger delivery. But it has a 1 in 1000 chance of stealing 1000000 dollars. Are you committing a sin when you push the switch because you are hungry?

Re: Stripe Capital

#136

Post by normalperson »

harshadante wrote: post #73
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

Harsha from the Stripe Capital team here. Access to capital has been one of our top user asks, and users were excited about the possibility of Stripe leveraging our knowledge of their business to offer them an integrated solution for their capital needs. As for pricing, the cost of the loan is a single fixed fee that adjusts to the loan amount, and it is paid over the course of the loan—there is no interest rate or a…

What's the blended APR you're charging?

Re: Stripe Capital

#137

Post by ksec »

uerobert wrote: post #105
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…

This is what is known as Merchant Cash Advance (MCA) https://en.wikipedia.org/wiki/Merchant_cash_advance , nearly every business with at least $20k credit/debit card sales a year has access to through their payment processor, bank, or companies that specialize in that sort of arrangement, of which there are tons. It is not a loan, what you are doing is basically selling your future card sales at a discount.

Is there a similar term for Cash Receivables not from Credit / Debit Card but from Business to Business 30 Days credit?

Re: Stripe Capital

#138

Post by robocat »

goatinaboat wrote: post #45
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…

structured repayment of the loan -- fixed fee, dynamic loan term -- is is an interesting way to make it hard to compare against other lenders You would need to consult an appropriate scholar to be sure, but it could be to be compatible with Islamic finance, which prohibits charging interest. Some banks do mortgages structured around fees rather than interest too.

I suspect that although this lending may be Sharia compatible, many other parts of Stripe would not be due to interest rate components (and depends on fine print of penalties, recovery etc too).

Re: Stripe Capital

#139

Post by antoinevg »

It does not please me that this announcement comes at a time when Stripe took an unprecedented FIVE DAYS to transfer incoming payments to my bank account.

Is this the new ultra-capitalism? Delay my payments so that I am forced to take on loans on unfavourable terms?

Re: Stripe Capital

#140

Post by unilynx »

ksec wrote: post #137
uerobert wrote: post #105

Earlier quoted context omitted.

This is what is known as Merchant Cash Advance (MCA) https://en.wikipedia.org/wiki/Merchant_cash_advance , nearly every business with at least $20k credit/debit card sales a year has access to through their payment processor, bank, or companies that specialize in that sort of arrangement, of which there are tons. It is not a loan, what you are doing is basically selling your future card sales at a discount.

Is there a similar term for Cash Receivables not from Credit / Debit Card but from Business to Business 30 Days credit?

Factoring ? https://en.wikipedia.org/wiki/Factoring_(finance)
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