4 ms·
> about 8-12 months to pay back Wow, that's a whopping 10-15% p.a. interest rate. Time to mint the money has come for Stripe, yeah?
by mkagenius 7y ago
> about 8-12 months to pay back
Wow, that's a whopping 10-15% p.a. interest rate. Time to mint the money has come for Stripe, yeah?
- shafyy 7y agoAs said by Patrick in a different comment, it really depends on how your sales are going therefore comparing it to a traditional loan with a fixed p.a. regardless of your sales doesn't make a lot of sense. I didn't read the exact terms, but based on the landing page it seems like your downside is capped, which is a big thing. I.e. if you suddenly stop making sales, you don't repay them . (not sure if there's a clause that makes you repay if you never make sales for a couple of years after taking out the loan)
- notyourday 7y agoFor a mom & pop store without a personal guarantee 10-15% is an excellent rate. If there's a personal guarantee attached then 10-15% is a terrible rate.
- theptip 7y agoIt's worth mentioning that many small businesses can't get SMB loans that cheap (if at all), and can also earn a higher return on each dollar reinvested in their business. In the early stages of an internet-enabled, distribution-bound company, 1 dollar reinvested (say in ad spend) can net you 1.5-2 dollars in increased sales. So even at a quite high APR, it's still a net win for many companies to take that debt on. Obviously you'd rather take on debt at a lower APR, but if your risk of default is high, nobody is going to give you a low APR.