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0 pointskennywinker9y ago0 comments

Sample size of one, but I have friends who run a small shop doing trade work (earning far less than 1m/year) and they were able to fairly easily get access to 10-20k of loans with interest rates in the <10% ball park (don't know exact numbers, also not mine to share). So to hear that kind of loan has "virtually disappeared" is surprising.

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pbreit9y ago

Frequently those 10% loans are for, say, 6 month payback periods so the effective APR is over 20%.

fludlight9y ago

Also, the typical borrowers tend to have at most a rudimentary knowledge of finance so they don't understand the terms of the loan. Sometimes they don't even bother reading the loan agreement. This makes anecdotal evidence extra unreliable.

HappyTypist9y ago

Generally interest is annualised and measured in APR.

pbreit9y ago

Actually, on these types of loans, generally not.

For example: https://squareup.com/capital

I don't really get how they arrive at their numbers but on first glance it looks insane. On the $10k loan with the $1,300 fee. If you had daily sales of $1,000 you'd pay the loan off in 100 days making the APR somewhere around 50%.

They are frequently fee-based, not rate based. And are frequently less than a year with the rate being highlighted, not the APR.

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0 pointskennywinker9y ago0 comments

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pbreit9y ago

Frequently those 10% loans are for, say, 6 month payback periods so the effective APR is over 20%.

fludlight9y ago

HappyTypist9y ago

Generally interest is annualised and measured in APR.

pbreit9y ago

Actually, on these types of loans, generally not.

For example: https://squareup.com/capital

They are frequently fee-based, not rate based. And are frequently less than a year with the rate being highlighted, not the APR.

j / k navigate · click thread line to collapse