Stripe Capital To Help Internet Companies With Access To Capital

By Amit Chowdhry ● September 9, 2019
  • Stripe announced it launched Stripe Capital, which makes it easier for Internet businesses running on Stripe to gain access to capital

Stripe recently announced it launched Stripe Capital — which is an easier way for Internet businesses running on Stripe to gain access to capital. This is a big deal since access to capital remains a challenge for most companies, especially online businesses.

Over the past decade, banks have cut their lending to small businesses in half according to the U.S. Chamber of Commerce. And it requires dozens of hours to fill out applications and paperwork only to take weeks or months for approved funds to become available. Even though startups and small businesses make up 99.7% of U.S. employers, these are the companies where access to capital has been difficult. So easier access to capital has been one of the top requests from Stripe users over the past two years.

Stripe Capital does not have lengthy applications or collateral obligations and approved funds typically arrive in a business’s Stripe account the next day. And eligibility is determined based on a company’s history on Stripe.


The algorithms for approving loans are based on data from Stripe’s extensive business network and other relevant signals for each business, including payment volume, percentage of repeat customers, payment frequency, and changes in revenue growth. Businesses repay money as they make money and it is based on a fixed percentage of daily sales without recurring interest charges or late fees.

“Stripe Capital makes it easy for internet businesses to get the funds they need, when they need them,” said Stripe Chief Product Officer Will Gaybrick. “It’s important to think about financial inclusion not just in terms of consumers, but also in terms of businesses. 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.”

One of the companies using Stripe Capital is Xirsys. Xirsys is providing server infrastructure for powering WebRTC applications and services. And when Xirsys needed more server capacity to meet the demand of its users, Xirsys turned to Stripe.

“Stripe Capital helped us expand our global footprint,” added Xirsys CEO and co-founder Richard Blakely. “We used the funding to set up servers in China, India, and Japan, allowing us to reach customers all over the world. Since then, we’ve seen our annual revenue more than double.”

Stripe Capital is also available to platforms and marketplaces on Stripe Connect. These B2B platforms can now offer their customers smart financing with access powered by Stripe.

“Traditional funding sources have not adapted well to the internet or the new business models it has enabled,” explained 451 Research research director Jordan McKee. “Stripe Capital is designed for modern internet businesses seeking help with their cash flow who need quickly accessible and easy-to-manage funding. With Stripe Capital, Stripe has removed significant complexity that previously barred many smaller companies and startups from access to the funds they need to grow.”

Stripe Capital is available to Stripe users in the United States now. And Stripe will facilitate access to the loans, handling the servicing and collection process on behalf of its bank partner. Stripe co-founder and president John Collison told TechCrunch that the financing for cash advances is being made through a single banking partner, but did not disclose which one it is. The typical range of the loans will be around $10,000 to $20,000.