Ignition Partners with Stripe Capital
Professional services platform Ignition has partnered with Stripe Capital to offer financing to U.S. accounting and bookkeeping firms. The partnership will allow eligible firms to access flexible financing directly through Stripe's APIs. This move is part of Stripe's broader expansion of its lending and capital products.
- Stripe Capital's financing offers are determined by a firm's payment history and activity on the platform, which streamlines the application process and reduces paperwork. Funds can be made available to approved firms in as little as two business days. - The financing provided through Stripe Capital can be either loans or merchant cash advances. In the U.S., the loans are issued by Celtic Bank, while merchant cash advances are provided by YouLend. - This partnership is part of Stripe's broader strategy of "embedded finance," where financial services like lending are integrated directly into software platforms. This approach aims to increase customer retention and lifetime value for platform partners like Ignition. - Ignition's platform is designed to automate the entire client engagement lifecycle for professional service firms, from proposals and engagement letters to billing and payment collection. It integrates with accounting software like QuickBooks and Xero. - Eligibility for Stripe Capital is based on factors like payment volume and history with Ignition's payment processing, which is powered by Stripe. The application process does not impact an individual's personal credit score. - Repayment of the financing is automated, with a fixed percentage of daily sales processed through Stripe being deducted. The financing comes with a single flat fee, with no compounding interest or late fees. - Ignition serves over 8,500 service-based businesses, and its customers have earned over $13 billion in revenue through the platform. The company has processed over AUD 3.6 billion in client payments since 2015. - This move reflects a larger trend in fintech where lenders use alternative data, such as transaction history, to assess risk and determine eligibility for financing, opening up capital to businesses that might not qualify for traditional loans.
