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Stripe gave us a $20k advance (indiehackers.com)
30 points by skies 4 months ago | hide | past | web | favorite | 7 comments

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. :(

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.

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.

Dude, it’s a loan.

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+%?

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.

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.

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