
Stripe gave us a $20k advance - skies
https://www.indiehackers.com/forum/stripe-gave-us-a-20k-advance-eabfac448d
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rando444
The word is "loan", they gave you a loan for which you are expected to pay
interest.

Also if you're aware that comparable bank loans can be cheaper why not
investigate that?

Lastly, if you don't need the money, all you did was agree to pay Stripe $2000
to hold theirs. :(

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jVinc
Just because you don't need money, it doesn't mean you cannot use it.
Hopefully they will be able to use that money to speed up their revenue growth
and quickly pay back stripe and be left at a higher revenue point than they
started. But just because you are in a position where money helps you (pretty
much everyone?) it doesn't mean you "need" the money as in you are searching
for loans or investments or have some desperate need right here and now.

Edit to add: It's not a loan, they aren't accruing interest and the cost is
fixed. This would be a weird type of deal if not for the 5% revenue fixed at
paying back the advance and fixed cost. If not for that, they would
essentially be getting a better and better loan the furter they waited it out,
as the effective annual rate goes down as time passes. It's still true that
the deal is better the longer you take to pay it back though, but the revenue
payback means that you have incentive to pay it back fast, because that means
you are making money. It's an interesting deal.

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rando444
Just because the interest structure is different doesn't make it any less of a
loan.

If you don't need the money, and don't even have a visible source of revenue
or business plan, throwing away $2k USD + 5% revenue on the chance you might
need credit someday is not the wisest of decisions.

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nodesocket
I've always wondered why there is not a lender that comes in significantly
below market rates (say 8%) and only lends to high quality companies with
consistent MRR. Go for volume lending route instead of earning higher rates.

What percentage of companies default on their loans to justify rates upwards
of 20+%?

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PhilWright
The irony of bank lending is that the companies that are safe to lend to, do
not need the money. The ones that really need a loan are the ones that might
not pay it back. When you do not need to borrow, your bank is constantly
trying to encourage you to borrow money. When you really need money, the bank
is not interested or wants a very high interest rate to compensate for the
risk.

In this case Stripe has the most important information about you, your revenue
numbers. So they can judge if you are a good risk or not, plus they spread the
risk over many companies. Finally, they avoid the biggest cost on small loans,
which is all the paperwork/admin on the backend.

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nodesocket
Makes sense. I wonder if they also offered no fees (6,12,24 months) as a form
of loan as well if that would be appealing to their customers. At the end of
the term, you'd be responsible for paying back all the fees during the term
plus interest.

