Stripe announces new lending arm Stripe Capital
Online business toolkit Stripe, valued at $22.5 billion, has announced the launch of its lending service called Stripe Capital.
The new service will give online companies a chance to borrow money which then gets repaid out of the companies’ future sales made through Stripe’s payment platform.
Loan amounts and repayments will be based on the customer’s transaction activity on Stripe, unlike the Fair Isaac Corporation (FICO) score system traditionally used.
“In the past you had to wait weeks or months while a loan officer reviewed an application,” says Stripe co-founder John Collison.
He adds: “But we can see a customer’s historical performance on Stripe and apply our machine learning models to do the work, analysing with no human intervention.”
Businesses using the lending service will see funds hit their Stripe account the day after they apply, and they can repay the loans as they earn.
Both Stripe and Stripe Connect customers will have access to the offering, which has been made possible financially by a single banking partner the company is yet to make public.
This news comes as competitors such as PayPal and Square report big growth in their loans in the second quarter.