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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!). htt

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 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 on paperwork and wait weeks or months for approval. > For internet businesses, capital is vital to growth: for marketing spend, inventory, engineering, and much else. > Stripe users report access to capital as one of the top factors affecting their growth.

thiscatis 7y ago
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.
- jonknee 7y ago
  Yes, a greatly improved experience is exactly Stripe's MO. That is innovative in my book.
  - oiasdjfoiasd 7y ago
    Not really innovative.
qrazhan 7y ago
Square and PayPal both have similar offerings, which piece here do you feel is innovative? (disclosure: I work at Square, but not on Capital.)
- jonknee 7y ago
  No application and approval process?
  - codemati 7y ago
    (disclosure: I work at Square but not on Capital) Square Capital takes only a few clicks to sign up, and loan offers automatically show up if you're already eligible [1], so this part of the offering is quite similar. https://squareup.com/us/en/capital https://squareup.com/us/en/capital
- harshadante 7y ago
  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 neat. But the innovation, if we succeed, isn't going to be in how the mechanics compare to other products. It's going to be in not hearing from Stripe businesses that access to capital is one of their biggest limiting factors.
  - abalone 7y ago
    This doesn't answer the question. That is exactly what Square Capital does (perhaps PayPal too).
    - edoceo 7y ago
      Stripe has exactly what Square and PayPal and many other offer. Similar rates, process, terms, etc - no outsized compelling reason for one over the other (similar to CC rates)
    - hobofan 7y ago
      I think it answers the question pretty well. They said it doesn't do anything different, and it was a missing product in their lineup that customers were expecting. Since that product is bundled to your payment processor, if you were with Stripe instead of Square or PayPal you didn't have access to those kinds of loans/cash advances.
      - abalone 7y ago
        They edited their comment to a completely different answer, without noting so. The original was just a marketing blurb.
  - deleted 7y ago
    [deleted]
- deleted 7y ago
  [deleted]
ikeboy 7y ago
QuickBooks, PayPal, and Amazon all offer effectively the same product. Being the fourth (at least, I may be missing some) major player in a market doing the same thing as everyone else isn't innovative.
atourgates 7y ago
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. Even this specific type of loan, called a "Merchant Chash Advance" - exists, and isn't anything new: https://www.fundera.com/business-loans/merchant-cash-advance https://www.fundera.com/business-loans/merchant-cash-advance
- asdf21 7y ago
  Have you actually tried to qualify though?
  - jgalt212 7y ago
    From my experience as a consumer and business borrower, it's very easy to borrow money at a crummy interest rate. ZIRP comes no where close to permeating SMB.
- dahdum 7y ago
  This does seem to be exactly like PayPal Working Capital, down to the application and fee structure.
  - deleted 7y ago
    [deleted]
  - adventured 7y ago
    I'm guessing that what Stripe is really bringing to the table here, is what they so often do: considerable simplification of annoying, often slow, red-tape-heavy processes. Their entire existence has been built on that. They look for the burr in the saddle. If PayPal had not been so incompetent with their API, Stripe probably wouldn't have had enough of an angle in the beginning to gain broad traction among developers.

thiscatis 7y ago

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.

jonknee 7y ago
Yes, a greatly improved experience is exactly Stripe's MO. That is innovative in my book.
- oiasdjfoiasd 7y ago
  Not really innovative.

qrazhan 7y ago

Square and PayPal both have similar offerings, which piece here do you feel is innovative? (disclosure: I work at Square, but not on Capital.)

jonknee 7y ago
No application and approval process?
- codemati 7y ago
  (disclosure: I work at Square but not on Capital) Square Capital takes only a few clicks to sign up, and loan offers automatically show up if you're already eligible [1], so this part of the offering is quite similar. https://squareup.com/us/en/capital https://squareup.com/us/en/capital
harshadante 7y ago
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 neat. But the innovation, if we succeed, isn't going to be in how the mechanics compare to other products. It's going to be in not hearing from Stripe businesses that access to capital is one of their biggest limiting factors.
- abalone 7y ago
  This doesn't answer the question. That is exactly what Square Capital does (perhaps PayPal too).
  - edoceo 7y ago
    Stripe has exactly what Square and PayPal and many other offer. Similar rates, process, terms, etc - no outsized compelling reason for one over the other (similar to CC rates)
  - hobofan 7y ago
    I think it answers the question pretty well. They said it doesn't do anything different, and it was a missing product in their lineup that customers were expecting. Since that product is bundled to your payment processor, if you were with Stripe instead of Square or PayPal you didn't have access to those kinds of loans/cash advances.
    - abalone 7y ago
      They edited their comment to a completely different answer, without noting so. The original was just a marketing blurb.
- deleted 7y ago
  [deleted]
deleted 7y ago
[deleted]

ikeboy 7y ago

QuickBooks, PayPal, and Amazon all offer effectively the same product. Being the fourth (at least, I may be missing some) major player in a market doing the same thing as everyone else isn't innovative.

atourgates 7y ago

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. Even this specific type of loan, called a "Merchant Chash Advance" - exists, and isn't anything new: https://www.fundera.com/business-loans/merchant-cash-advance https://www.fundera.com/business-loans/merchant-cash-advance

asdf21 7y ago
Have you actually tried to qualify though?
- jgalt212 7y ago
  From my experience as a consumer and business borrower, it's very easy to borrow money at a crummy interest rate. ZIRP comes no where close to permeating SMB.
dahdum 7y ago
This does seem to be exactly like PayPal Working Capital, down to the application and fee structure.
- deleted 7y ago
  [deleted]
- adventured 7y ago
  I'm guessing that what Stripe is really bringing to the table here, is what they so often do: considerable simplification of annoying, often slow, red-tape-heavy processes. Their entire existence has been built on that. They look for the burr in the saddle. If PayPal had not been so incompetent with their API, Stripe probably wouldn't have had enough of an angle in the beginning to gain broad traction among developers.