Stripe has thrown its hat into the business lending sphere with the launch of its new service, Stripe Capital.
Small and emerging businesses running on the Stripe payment platform can now avail of the fintech company’s newly launched lending service, Stripe Capital.
The company promises that since the new service is fully integrated with Stripe, prospective borrows won’t have to endure a lengthy application process and funds can hit a user’s Stripe account the following business day.
Businesses will be allowed to “repay as they earn”, meaning repayments can come through a small business’s future sales made through the Stripe platform, and loan amounts and repayments will be predicated on the customer’s transaction activity on Stripe itself.
The company will also extend the service to its platform partners, such as online store builders and B2B SaaS companies. The service is available to all US customers as of 5 September.
“Stripe Capital makes it easy for internet businesses to get the funds they need when they need them,” said Will Gaybrick, Stripe’s chief product officer. “It’s important to think about financial inclusion not just in terms of consumers, but also in terms of businesses. Businesses, especially small businesses and start-ups, are the engines for job creation in our economy.
“It should be trivially simple and lightning-fast for them to access the capital they need to smooth their cash flow and invest in their own growth.”
According to the company, banks have cut their lending to small business almost in half over the last 10 years. Research from the Federal Reserve in the US says that as many as 70pc of small businesses do not have access to the funding they need.
Company founder John Collison noted in an interview that financing for cash advances will come via a single banking partner, however, the company is not making that partner public at this time.
This product news continues a consistent trend on Stripe’s part of diversifying its business. It has also offered companies incorporation services, fraud management and more.