Stripe - Merchant Cash Advance - Loans for Small Business

Modified on Wed, 16 Oct at 6:16 PM

How Stripe Capital Works

Stripe Capital offers financing for eligible merchants processing payments through Stripe.
Loans don’t have late fees, early repayment fees, or origination fees. Instead, the total amount you owe is your loan amount plus a flat fee.
Your payments are withheld directly from your sales on Stripe.

Offer Sign-Up Flow

Repayment Dashboard

Review your offer

Stripe uses a combination of eligibility criteria (including overall processing volume and history on Stripe) to extend a financing offer. If your US business is eligible, and has at least 9 months of processing history, Stripe might send you an email and Dashboard notification to advise you of an available offer.

Your offer is available for 30 days, after which, we re-evaluate your business to see if you’re eligible for an additional offer. Log into the Capital tab of your Dashboard to use a slider to customize the amount of your offer up to the maximum offer amount. The loan terms adjust based on the amount you choose. If you’re seeking financing at a later time, continue checking your email and the Capital tab of your Dashboard to make sure you’re reviewing your most current offer. We might even extend additional offers to you while you’re actively paying down your current loan.

After you select an offer, we’ll review your application. If you’re approved, we transfer the funds to your Stripe account, typically in as few as 1-2 business days. To make sure funds successfully disburse from your Stripe account, you must set a valid bank account as your primary payout method.

No impact to your personal credit

Applying for financing through Stripe Capital doesn’t require a personal credit check and won’t affect your personal credit score. Additionally, Stripe Capital reports performance for US businesses to the Small Business Financial Exchange, who uses this information to build a financial profile for your business, which can help your business get access to credit with other providers.

Linked accounts

You always have control over the accounts that you share with Stripe and can update or disconnect your linked accounts at any time.

Repayment

The total cost of your financing is your loan amount plus a flat fee. Repayment of your loan occurs automatically by deducting a percentage of your Stripe sales, known as the repayment rate. This means you pay down more when your business has higher sales and less if business slows down. The single flat fee isn’t charged upfront— it’s paid over the length of the loan.

Every loan has a maximum term (for example, 18 months) which is listed on your loan agreement. There’s no prepayment penalty, and you can make additional payments or pay the total amount you owe in full at any point in the Capital tab of your Dashboard.

Stripe automatically evaluates you for a new offer as you pay down your loan, regardless of whether you make additional payments or pay it off early.

Minimum payment

You must repay a minimum amount toward your loan every payment period. Stripe automatically deducts a percentage of your sales at the repayment rate, which counts toward your minimum. If the total amount you repay through sales doesn’t meet the minimum, you must pay the remaining amount at the end of the period. If you haven’t met the minimum by the end of each payment period, Stripe automatically debits the balance needed to meet your minimum from your bank account or account balance. You can also make manual payments toward your minimum through your Dashboard.

You can view your minimum in the Capital tab of your Dashboard or in your loan agreement.

If you’re unable to meet your minimum for one or more periods, reach out to support and we’ll work with you to get back on track and meet your loan obligations. If you continue to miss your minimums, we might take additional action, as detailed in your loan agreement.

Fixed payment loans

If your loan has a fixed monthly payment instead of a minimum payment, Stripe stops witholding from your Stripe sales when you meet the fixed payment amount. If your sales witholdings don’t meet the fixed payment by the end of the payment period, Stripe automatically debits the balance. You can also make manual payments at any time through your Dashboard using the Make payment option.

Examples

The following example scenarios demonstrate how the minimum payment process works.

Example 1: You successfully meet your minimum through daily sales deductions.

Your minimum amount is 2,000 USD for the 60-day period ending on March 1.
In that period, you repaid 2,500 USD of your loan balance through Stripe deducting a fixed percentage of your sales volume (the repayment rate).
You’ve successfully met your minimum plus an additional 500 USD toward your total balance for this payment period.
In the next 60-day period, you still must meet the minimum of 2,000 USD.

Example 2: You don’t meet your minimum through daily sales deductions.

Your minimum is 2,000 USD for the 60-day period ending on March 1.
In that period, you repaid 1,500 USD of your loan balance through Stripe deducting a fixed percentage of your sales volume (the repayment rate).
On March 1, you still owe 500 USD toward your minimum (2,000 USD – 1,500 USD = 500 USD) and you must pay the remaining balance of your minimum.
On March 1, Stripe automatically debits 500 USD from your bank account or account balance to meet your minimum.

Security interests

The Stripe Capital loan agreement includes security interests taken as collateral for your loan. A UCC-1 financing statement might be filed in connection with your loan based on several factors, including the size of your loan, facts and circumstances about your business, and so on.

After you finish paying off your loan, you can contact us with a request to terminate a UCC-1 filing.

Unknown secured party

Creditors sometimes use a third party to file and maintain lien positions as the registered agent of the creditor. Wolters Kluwer is Stripe Capital’s third-party representative. If you’re unsure of what creditor the third party is acting on behalf of, we recommend that you contact the third party directly.

Taxes

Tax reporting often depends on your specific situation, so we encourage you to talk with a tax advisor. In general, funds through Stripe Capital wouldn’t be considered taxable income at the time of receipt, and the amounts withheld to satisfy your obligations aren’t tax deductible.

Stripe Capital loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank Member FDIC.

Link to Stripe Documentation.