Payments giant Stripe is stepping up its diversification efforts, launching a cash advancement service for the internet firms that already use its services.
Stripe says that banks have slashed their lending to SMEs almost in half over the last decade. Those that do get loans, typically have to spend 25 hours on the paperwork and then wait weeks or months to access their funds.
From today, Stripe Capital promises to make the process faster and easier for American online firms by taking advantage of its existing integration with them. The fintech unicorn is promising no lengthy applications or collateral obligations, with funds hitting approved applicants' Stripe account the next day.
Eligibility is determined based on a company’s history on Stripe, with algorithms analysing hundreds of relevant signals for each business, including payment volume, percentage of repeat customers, payment frequency, and changes in revenue growth.
Repayments are automated and flexible: businesses repay money as they make money. They repay the loan with a fixed percentage of daily sales; there are no recurring interest charges or late fees.
And, in addition to businesses running on Stripe directly, Stripe Capital is also available to platforms and marketplaces on Stripe Connect.
Will Gaybrick, chief product officer, Stripe, says: "Businesses, especially small businesses and startups, 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."
The service - which is similar to offerings from rivals PayPal and Square - is the latest move by Stripe to move beyond its core business of making it easy for online sellers to accept card payments.
Already worth more than $22 billion, the company is planning to continue is raid growth by entering new areas, including instore payments and the upcoming launch of a business credit card.