Re:Stripe Capital
by theptip on Thursday September 05, 2019 @03:59PM
(#20890174)
It's worth mentioning that many small businesses can't get SMB loans that cheap (if at all), and can also earn a higher return on each dollar reinvested in their business.
In the early stages of an internet-enabled, distribution-bound company, 1 dollar reinvested (say in ad spend) can net you 1.5-2 dollars in increased sales. So even at a quite high APR, it's still a net win for many companies to take that debt on.
Obviously you'd rather take on debt at a lower APR, but if your risk of default is high, nobody is going to give you a low APR.
In the early stages of an internet-enabled, distribution-bound company, 1 dollar reinvested (say in ad spend) can net you 1.5-2 dollars in increased sales. So even at a quite high APR, it's still a net win for many companies to take that debt on.
Obviously you'd rather take on debt at a lower APR, but if your risk of default is high, nobody is going to give you a low APR.