Stripe Ventures Into Merchant Cash Advance Financing
Stripe, a payments firm lauded as the world’s most valuable private fintech company (at $22.5B), has officially launched a merchant cash advance product.
Dozens of news outlets have announced that the company is providing loans, but that’s not all, deBanked has learned. Both loans and merchant cash advances are available.
The company’s FAQ page originally explained the “Capital” product as a merchant cash advance but it’s since been updated to reflect that they offer access to both merchant cash advances and loans. An official Stripe spokesperson also clarified that an offer could be an MCA or a loan. The updated FAQ says that funding terms would be available in the customer dashboard, in the funding contract, and that which one a customer qualifies for depends on the specifics of their business.
Stripe merchant account customers can find out if they’re eligible for funding in their dashboard. If they’re not, they can still send Stripe a note through the dashboard to signal that they’re interested, say how much they’re looking for, and select what they plan to do with the funds. Stripe says they will not review your credit report and that all offers are based solely on Stripe transaction history.
The new product will not disrupt the separate integration with Funding Circle, according to a statement provided to Digital Transactions. Stripe customers can still apply to Funding Circle by connecting their Stripe account. Funding Circle offers term loans that range from six months to five years.
Stripe’s MCA product is currently only available in the US, but the company’s founders, Patrick and John Collison, brothers, hail from an unlikely place, rural Ireland. The company handles tens of billions of dollars in payments a year across 34 countries.
Like other recent entrants into the small business funding space, Stripe’s advantage is its ability to tap into its existing customer base. Other payments companies such as PayPal and Square, for example, were among the top four largest originators (for which public data is available) of alternative small business funding in 2018.
Note: This article has been updated to reflect the changes made on Stripe’s website as well as an additional clarification from the company.Last modified: September 6, 2019
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.