Online Processor Stripe Recruits Funding Circle to Provide Fixed Rate Loans to Merchants – Digital Transactions

Stripe Inc. has recruited peer-to-peer funding provider Funding Circle to provide loans to merchants using Stripe to process payments. The London-based lender has joined the Stripe partner program, allowing merchants to apply for loans up to $ 500,000 by uploading data that can support their request.

Based in San Francisco Bandaged says it processes payments online and supports other technology for what it says are “millions” of merchants. By recruiting Funding Circle, Stripe can also compete more directly with Square Inc., which offers a fundraising program called Square Capital.

“We are delighted to welcome Funding Circle to our vibrant ecosystem of partners that amplifies the value of Stripe for our users,” said Vicki Lin, Ecosystem Manager at Stripe, in a statement. “With this partnership, Funding Circle will reach out to the millions of businesses on Stripe to provide more effective fundraising options, and help us on our mission to increase the [gross national product] from the Internet.

Funding Circle, nine years old, offers fixed rate loans with terms ranging from six months to five years. It indicates that US companies have so far borrowed $ 1.9 billion and claims that this makes it the largest such platform in the United States. The loans, which are funded by individual investors, have totaled $ 8.6 billion so far, according to the company. Some 62,000 small businesses received loans.

Processors love loan programs because they attract and retain small merchants by tying them more closely to the payment service. A prime example is Square Capital, which Square launched in May 2014. This program differs from Funding Circle’s approach, however, in that it extends cash advances based on the dollar merchant process through Square.