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Very neat idea. But I worry that it's vulnerable to bad people. Got a hefty personal bill coming up, and you're pretty confident your SaaS business will be de

Very neat idea. But I worry that it's vulnerable to bad people. Got a hefty personal bill coming up, and you're pretty confident your SaaS business will be dead within 6 months but Stripe has no way of knowing based on current numbers? Thinking of getting a divorce (startup or marital)... maybe time to grab the largest advance possible before your soon-to-be ex(-co-founder) realises? The problem is that even if only 1% of Stripe's customers might match these kinds of profiles, that same 1% might be taking 20% of the Stripe Capital advances.

onetimemanytime 7y ago
>>"But I worry that it's vulnerable to bad people." You worry too much for them, that's why they charge a hefty interest fee. A certain % of non-payments or partial payments are built in.
- jonathonadler 7y ago
  They probably have some data science and a decent fraud model to keep risk within an acceptable band too.
  - onetimemanytime 7y ago
    either way it's a business move, they either win or loose. If they get screwed, they'll end it and take a loss. Part of business, they're not doing it as charity.
  - softawre 7y ago
    > Stripe > Decent fraud model Yeah, I would think so.
peripitea 7y ago
I'm not an expert on small business loans, but I would guess that incentives take care of most of this problem. The higher the loan you have, the more cash your business must have been generating in the first place, therefore the higher incentive you have to figure out how to keep it running. There probably aren't too many scenarios where you are both eligible for a material loan from Stripe and yet not highly enough incentivized to figure out how to make the business work to the best of your abilities.
GordonS 7y ago
I think the up-front fee would discourage this for that particular segment.
- jschulenklopper 7y ago
  I guess the fee is included in the monthly repayments, not charged up-front.
  - GordonS 7y ago
    Oh, then I misunderstood that.

onetimemanytime 7y ago

>>"But I worry that it's vulnerable to bad people." You worry too much for them, that's why they charge a hefty interest fee. A certain % of non-payments or partial payments are built in.

jonathonadler 7y ago
They probably have some data science and a decent fraud model to keep risk within an acceptable band too.
- onetimemanytime 7y ago
  either way it's a business move, they either win or loose. If they get screwed, they'll end it and take a loss. Part of business, they're not doing it as charity.
- softawre 7y ago
  > Stripe > Decent fraud model Yeah, I would think so.

peripitea 7y ago

I'm not an expert on small business loans, but I would guess that incentives take care of most of this problem. The higher the loan you have, the more cash your business must have been generating in the first place, therefore the higher incentive you have to figure out how to keep it running. There probably aren't too many scenarios where you are both eligible for a material loan from Stripe and yet not highly enough incentivized to figure out how to make the business work to the best of your abilities.

GordonS 7y ago

I think the up-front fee would discourage this for that particular segment.

jschulenklopper 7y ago
I guess the fee is included in the monthly repayments, not charged up-front.
- GordonS 7y ago
  Oh, then I misunderstood that.