Stripe look to diversify with lending
(5 September 2019 – United States) Payments company Stripe is launching a cash advancement service for American based firms that already use its services.
Stripe Capital is hoping to take advantage of its existing integration with SMEs and has said they will make the process faster and easier for small businesses looking for loans. The fintech is promising no lengthy applications or collateral obligations with funds hitting approved applicants’ Stripe account the next day.
Eligibility is determined on a company’s history on Stripe, with algorithms analysing hundreds of relevant signals for each business, including payment volume, percentage of repeat customers, payment frequency, and changes in revenue growth.
Repayments are automated and flexible: businesses repay money as they make money. They repay the loan with a fixed percentage of daily sales; there are no recurring interest charges or late fees.
In addition to businesses running on Stripe directly, Stripe Capital is also available to platforms and marketplaces on Stripe Connect.
The service - which is similar to offerings from rivals PayPal and Square - is the latest move by Stripe to move beyond its core business of facilitating online sellers to accept card payments.