7 ms·
Doesn't this kind of sound like payday loans https://en.wikipedia.org/wiki/Payday_loan https://en.wikipedia.org/wiki/Payday_loan ?
by antonioevans 10y ago
Doesn't this kind of sound like payday loans https://en.wikipedia.org/wiki/Payday_loan https://en.wikipedia.org/wiki/Payday_loan ?
- ryporter 10y agoIn some sense, but there is a key difference. "Companies can typically repay the loan as a percentage of cash flow so payments naturally adjust to revenue."
- notahacker 10y agoNot really. Payday loans provide short term fixes to the desperately poor consumers with no other options, typical APRs of 2000% and above, because default rates are high and admin costs high relative to the loan size. Revenue based finance offers businesses with attractive gross profit margins the choice of obtaining growth capital without giving up any equity, and has a moderately high APR because the lender shares a fair amount of risk and the repayment terms are very flexible.