Stripe, the financial technology company, fresh off a capital raise that gave it a valuation of $22.5 billion, is expanding into lending and rolled out its first credit card for businesses.
Earlier this month, the San Francisco-based fintech company announced Stripe Capital, which was designed to help Internet businesses get access to funds to keep their businesses up and running.
In a blog post when announcing the new service, Stripe said accessing capital is the biggest obstacle small businesses face when trying to grow. “Traditional lenders aren’t set up to serve internet businesses, typically requiring lengthy applications, complex collateral obligations, and fixed payment schedules,” said the startup in the blog post. “We built Stripe Capital to cut through the red tape. Our goal is to provide access to fast, flexible financing that helps online businesses invest in growth.”
Eligibility for Stripe Capital is based solely on the business’ history with Stripe. The company did away with a lengthy application process and charges one flat fee that never changes. Stripe will deduct a fixed percentage of sales until the loan is repaid. Strip Capital is only being offered to select businesses in the U.S. in the beginning. The company does have plans to expand the service with the goal of offering it to every business on Stripe.
But providing Internet businesses with access to funds wasn’t the only announcement Stripe had this month. More recently it announced a corporate credit card geared toward Internet companies
“Many of the existing solutions for managing business spending simply aren’t well-suited to modern internet companies: they require lengthy applications, take time to implement, and add yet another service or integration for companies to manage,” wrote Stripe in a press release announcing the new credit card. “With the Stripe Corporate Card, businesses on Stripe can get started right away: it takes just a few minutes from signing up to having a card you can use online, and users get deep insights and smart controls over their cards.”
With the launch of its corporate credit card Stripe is taking on Brex, the fintech company that makes a credit card for startups and entrepreneurs and has a valuation of $2.6 billion.
Brex and Stripe are among a group of fintechs startups that are catering to small businesses and Internet businesses that have long been ignored by the traditional financial players. To cater to this group of customers they are rolling out virtual cards, digital expense management tools and using data analytics to glean insights out of the payment history of customers. Brex has been able to stand out because of its underwriting process. It underwrites the borrower in real-time rather than looking at its financial history. Outside of Brex, Stripe has to contend with competition from American Express, Divvy and Bento for Business among others.