141–150 of 174 posts
Unfortunately, it's probably going to take some time for people to realize the benefits of a "slow and inefficient" means of banking with lots of people in between. It sucks sometimes, but boy am I okay with it when they spot fraud or it takes someone days to empty my bank accounts instead of minutes.
According to the St Louis Fed, the average interest rate for Small Businesses was about 3.5 - 5% [2]. For me this sounds like an incredibly bad deal.
I'm curious about the small business loans. I'm from Europe and the animations suggests for a $9000 loan a total repayment of $10305. Let's assume you make $5000 in revenue per month and they use 10% as a repayment cut per transaction. That would yield a 20 month long repayment schedule. The "interest" would be roughly 7% annually. In today's world, isn't that greedy? In today's world, Warren Buffet can issue a 0% co…
However, you don't account for credit risk whereas the st louis fed rates are based on existing bank small business loans which are very conservative.
Presumably the expected defaults on Squares product would be very very high.....
I'm curious about the small business loans. I'm from Europe and the animations suggests for a $9000 loan a total repayment of $10305. Let's assume you make $5000 in revenue per month and they use 10% as a repayment cut per transaction. That would yield a 20 month long repayment schedule. The "interest" would be roughly 7% annually. In today's world, isn't that greedy? In today's world, Warren Buffet can issue a 0% co…
I'm not 100% sure what the FRED chart you cited means by "Effective Loan Rate for Small Business Administration" but those are most likely collateralized.
Earlier quoted context omitted.
> One Thing And One Thing Only I mean, that's just fashion that evolved in response to the previous fashion, which was bloated software that did a million things badly. Fair enough that the pendulum should swing back the other way, but there certainly is a place for software that only does one thing and does it well.
The history of tech companies can be viewed as a constant bundling and unbundling of products, depending on where the inefficiency is.
It's amazing to me how much of a better product can be created when everything is in one place. It's obvious that when you're charging customers and paying invoices through the same interface, that you'll have more visibility on your cash flow and it'll generally be easier to use, but this goes so much further. The reason those loans are easy is because Square know your history of charging customers. The reason they…
This is where fintech has been headed for some time -- a bundle of complimentary products all in a single app (payment provider + bank + loan company + crypto + etc.). Square are demonstrating this here for business, some Chinese finance apps went down this road years ago, Revolut are billing themselves as a "financial super app". There's tremendous advantage in having everything in one place. Each individual product…
I guess at some point, starting a business will be equivalent to downloading the square business app.
While Square makes (more) sense to get into the banking game, I've noticed a lot of companies only tangentially related to finance doing similar things, and I wonder what it's indicative of: - T-Mobile offers an exclusive checking account for their customers - Credit Karma promoting their own debit card - Robin hood doing "Cash Management" - Coinbase offering a debit card with crypto rewards Has something changed wit…
Everyone wants in on the game. There's this really big piece of the pie where fees and interest come into play. Every transaction has fees and some people carry balances that generate a lot of money in interest. It's how credit card providers can offer rewards. At some point in our future we'll probably see the end of these rewards cards because the government will likely regulate it. Which I think is actually a good…
The biggest question I would have is: How good the customer support is? I have the worst luck, and all my new age accounts like Robinhood and Coinbase have little to no customer support compared to the incumbents. I got lucky and the Robinhood situation resolved itself but I've been trying for over a year to contact Coinbase and circle the drain. Hopefully Square has better support.
I'm curious about the small business loans. I'm from Europe and the animations suggests for a $9000 loan a total repayment of $10305. Let's assume you make $5000 in revenue per month and they use 10% as a repayment cut per transaction. That would yield a 20 month long repayment schedule. The "interest" would be roughly 7% annually. In today's world, isn't that greedy? In today's world, Warren Buffet can issue a 0% co…
7% is a low interest rate for an unsecured small business loan. I'm not 100% sure what the FRED chart you cited means by "Effective Loan Rate for Small Business Administration" but those are most likely collateralized.
Let's just hope for all borrowers inflation remains "transitory" and growing, than it isn't such a big deal.