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If it seems like you were paying it back too quickly you should switch most of your sales to another payment provider like PayPal or Square to throttle your Str

If it seems like you were paying it back too quickly you should switch most of your sales to another payment provider like PayPal or Square to throttle your Stripe revenue lowering your effective APR until it's compatible with a bank line-of-credit.

adventured 7y ago
They surely have built-in terms covering that premise. Otherwise you could switch 99% of your payment processing off of Stripe and pay them a trickle of your sales over a decade. For example, I wouldn't be surprised if they legally tie repayment to your actual business sales (or any sales conducted through a qualified payment processor, comparable to Stripe; some legal structure that catches this), not just your Stripe sales. In the pitch they only mention repayment directly coming out of your Stripe sales, because that simplifies the pitch. Otherwise it exposes them to an extremely obvious angle for being taken to the cleaners both by scammers and plain desperate business operators. They lend a business $100,000. That business immediately switches 99% of their processing to someone else. Repayment occurs at a comical rate - forever. There's no chance they left themselves open to something so obvious, it'd never get past even a mediocre lawyer. Edit: what you would do is build a requirement into the loan contract that you must pay out of all sales conducted by your business and or all sales handled by any payment processor (I'd go with all sales, if I were Stripe), not just sales that go through Stripe. A slight variation of that, would be that Stripe is granted the legal right to audit your business first, in the event of a certain % drop in sales / repayment. The second step, if they catch you evading them in the audit, is that the contract stipulates they have the right to collect from all business sales. The point of this step-based process, is to avoid constantly throwing a serious flag at operators on modest drops in sales. So if sales - repayment - drops by a modest N%, they do nothing initially, perhaps send a friendly message to check in; if sales (supposedly) drop dramatically (either short-term or longer-term), they ramp up their approach accordingly including becoming more aggressive in talking to you and possibly including an audit (business review) request. Keep avoiding them, it becomes a serious legal matter, as it would with any major creditor. In any large scale financing business like this, the creditor must be very well equipped to pursue legal remedies against the borrower. You can bet that Stripe has built in an angle to pursue attempts to evade them, in small ways and up to entirely ghosting them on the loan.
- amirhirsch 7y ago
  I do wonder about those terms then. I run a Shopify store that did millions of dollars via Stripe and PayPal then quickly transitioned to mostly revenue from paper checks when we backed away from consumer sales towards bulk orders, retail and distributors. I'm considering turning off direct consumer sales entirely and moving to Amazon.
nodesocket 7y ago
That’s what I was wondering if you switch over to Braintree after taking the Stripe loan and just leave a small percent of transactions on Stripe you can have the loan be many years lowering the APR to compete with a small business loan. How are they going to know you switched transactions over to Braintree? Could just be business slowing down.
- asah 7y ago
  Naively, I'd guess you can build an ML model to detect the difference...

adventured 7y ago

They surely have built-in terms covering that premise. Otherwise you could switch 99% of your payment processing off of Stripe and pay them a trickle of your sales over a decade. For example, I wouldn't be surprised if they legally tie repayment to your actual business sales (or any sales conducted through a qualified payment processor, comparable to Stripe; some legal structure that catches this), not just your Stripe sales. In the pitch they only mention repayment directly coming out of your Stripe sales, because that simplifies the pitch. Otherwise it exposes them to an extremely obvious angle for being taken to the cleaners both by scammers and plain desperate business operators. They lend a business $100,000. That business immediately switches 99% of their processing to someone else. Repayment occurs at a comical rate - forever. There's no chance they left themselves open to something so obvious, it'd never get past even a mediocre lawyer. Edit: what you would do is build a requirement into the loan contract that you must pay out of all sales conducted by your business and or all sales handled by any payment processor (I'd go with all sales, if I were Stripe), not just sales that go through Stripe. A slight variation of that, would be that Stripe is granted the legal right to audit your business first, in the event of a certain % drop in sales / repayment. The second step, if they catch you evading them in the audit, is that the contract stipulates they have the right to collect from all business sales. The point of this step-based process, is to avoid constantly throwing a serious flag at operators on modest drops in sales. So if sales - repayment - drops by a modest N%, they do nothing initially, perhaps send a friendly message to check in; if sales (supposedly) drop dramatically (either short-term or longer-term), they ramp up their approach accordingly including becoming more aggressive in talking to you and possibly including an audit (business review) request. Keep avoiding them, it becomes a serious legal matter, as it would with any major creditor. In any large scale financing business like this, the creditor must be very well equipped to pursue legal remedies against the borrower. You can bet that Stripe has built in an angle to pursue attempts to evade them, in small ways and up to entirely ghosting them on the loan.

amirhirsch 7y ago
I do wonder about those terms then. I run a Shopify store that did millions of dollars via Stripe and PayPal then quickly transitioned to mostly revenue from paper checks when we backed away from consumer sales towards bulk orders, retail and distributors. I'm considering turning off direct consumer sales entirely and moving to Amazon.

nodesocket 7y ago

That’s what I was wondering if you switch over to Braintree after taking the Stripe loan and just leave a small percent of transactions on Stripe you can have the loan be many years lowering the APR to compete with a small business loan. How are they going to know you switched transactions over to Braintree? Could just be business slowing down.

asah 7y ago
Naively, I'd guess you can build an ML model to detect the difference...