7 ms·
Sounds like a payday loan
by danmur 6y ago
Sounds like a payday loan
- mandelbrotwurst 6y agoIt's a B2B product.
- indolering 6y agoA B2B payday loan.
- lunatuna 6y agoB2B payday loan + shark tank = pipe
- 0xB31B1B 6y agofor real 99% of the economy runs on B2B payday loans
- danesparza 6y agoThis is a sad statement and may be very true. It doesn't mean this product is good for anybody. It just means your entire business is essentially in debt to somebody else. Debt = risk.
- dillondoyle 6y agoI wonder if that is actually a good idea for disruption that could also do a lot of good for underbanked and underprivileged. Looks like Pipe offers a trading platform to bid and buy something kind of like a collateralized 'bond' (future monthly income). I would assume you could bring the 'spread' down and thus the pay day borrower gets a lower interest rate (is spread the right word?) Given the huge profit of predatory lenders there is room to lower rates. Definitely big challenge that might not work is how to assign a risk rating to a single human with no banking/credit history. Maybe another idea could use ML & more consumer data to create fairer & more predictive credit ratings.
- tptacek 6y agoIt's (essentially) factoring. https://en.wikipedia.org/wiki/Factoring_(finance) https://en.wikipedia.org/wiki/Factoring_(finance)
- pbourke 6y agoSo a payday loan with a fancy name?
- tptacek 6y agoNo? Again: factoring.
- andreareina 6y agoHuh, I'd previously thought that transfer of risk was an integral component of factoring, but apparently not: > If the factoring transfers the receivable "without recourse", the factor (purchaser of the receivable) must bear the loss if the account debtor does not pay the invoice amount.[1] If the factoring transfers the receivable "with recourse", the factor has the right to collect the unpaid invoice amount from the transferor (seller).
- adaml_623 6y agoDifferent terms and conditions on the contract will lead to different fees and discounts, etc. Even in a scenario where the transfer specified "with recourse" there is no guarantee that the seller will still be solvent so there is a risk to the purchaser.
- postingawayonhn 6y agoAustralian company Greensill that is involved in this area of finance has just become insolvent. They had Softbank backing.
- tptacek 6y agoAnd? Banks have become insolvent too; doesn't say much about the viability of banking.