US payments firm Stripe is launching a cash lending service to its online business customers.

The payments software giant, founded in 2009, said that Stripe Capital would help small to medium-sized enterprises (SMEs) access finance, as traditional banks have scaled back their lending.

The service integrates with Stripe’s original services and data archive, offering a more streamlined application, with funds typically hitting the user’s account the next day.

Stripe is handling the loans on behalf of its banking partner, which will issue the loans. Eligibility for the funding is determined based on a company’s history with Stripe.

Drawing on data from its business network, algorithms analyse hundreds of relevant signals for each business, including payment volume, percentage of repeat customers, payment frequency and changes in revenue growth.

Repayments are automated and flexible: businesses repay money as they make money, with a fixed percentage of daily sales; there are no recurring interest charges or late fees.

Will Gaybrick, Stripe’s chief product officer, said: “Stripe Capital makes it easy for internet businesses to get the funds they need, when they need them.”

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