[AdamSC1]

It seems a bit as though the model is set up for independent operators and 'Mum & Pop' shops that use Stripe but don't have the business acumen to see the issue.

Or, people who have a good history of selling with Stripe, but, lack the credit rating, history or collateral to use other lenders.

It's a very carefully and cleverly thought out payment model, which leads me to believe they knew exactly which consumer base they were going after.

[rossdavidh]

Well, the "Mum & Pop" stores you mention, are far more likely to be at risk from taking out a loan that they end up not being able to pay back on time, and late fees and compounding interest make the total cost of the credit far more than they expected. It seems like the total risk here is visible, whereas the worst-case risk of a conventional APR model is difficult for inexperienced users to perceive.

[dawnerd]

You nailed it on the last point. It also greatly helps small stores that have highly variable sales. Like with my ebay shop I can go days without selling anything, then have a weekend where I pull a few grand.

[zonethundery]

This seems like a relatively standard MCA product, at better rates than typical MCA providers. Stripe's betting its underwriting is superior (very likely) and it has a lower cost of capital than competitors. Square Capital does the same thing.

It seems novel for folks outside the industry but businesses are bombarded by MCA adverts on the daily and have been for years.