3 ms·

I have worked in the small business lending space before. Stripe cannot price in terms of APR because legally, it is not a "loan". It's a purchase of future rec

I have worked in the small business lending space before. Stripe cannot price in terms of APR because legally, it is not a "loan". It's a purchase of future receivables. If it was a loan, the APR would be considered usurious in most states.

deleted 7y ago
[deleted]
zonethundery 7y ago
In most states aren't loans for commercial purposes (or to certain kinds of entities [c-corps, llcs, partnerships] assumed to be commercial) are exempted from usury restrictions?
webmaven 7y ago
> legally, it is not a "loan". It's a purchase of future receivables. Interesting. From this perspective, Stripe is actually getting into the factoring business: https://en.wikipedia.org/wiki/Factoring_(finance) https://en.wikipedia.org/wiki/Factoring_(finance)
GordonS 7y ago
As @pc has been active here, I'd love to hear from him on this - in legal terms, according to your lawyers, is Stripe Capital considered a loan?
- edwinwee 7y ago
  I'm definitely not a lawyer, but I work at Stripe. Capital works a bit differently. Yes, we offer loans, but we also offer cash advances (with a focus on loans right now). They're pretty similar—repayment via your sales, fast funding, a fixed fee with no interest, and a streamlined application, to name a few things. When we make an offer, we’ll make clear if it’s actually a loan or cash advance (and what that means for your business).