Purely out of curiosity - and you may not be able to, or may not want to answer - but how does a company like Stripe structure this sort of business? Are you making loans right out of your working capital, or do you have separate debt obligations of your own to cover these, or something else? I would imagine this sort of thing is regulated somehow, but I don’t really know... would love to hear whatever you can share!
Surprisingly, this is a totally unregulated industry on the federal level. Legally, they aren't loans; it's a purchase of future receivables. Google "merchant cash advance regulation" and have your mind blown.
California has light regulation in the form of disclosures similar to those for consumer credit. CA is also the only state that requires any licensing but the license is for the company, not for any of the brokers, and is super easy to obtain.
We’re working with banking partners to originate the loans. We’ll fund some of these loans ourselves, and we’ll also work with investors to help us extend even more capital.
