Facebook has been working on a new service for small businesses that advertise on their platform: business loans. Working with Toronto-based Clearbanc, the social media network has created a plan called Chrged in which Facebook Ad accounts can be linked with the firm for offers of up to half a million dollars in growth capital.
The funds, which are cleared by Clearbanc, are merchant cash advances instead of traditional loans, which gives the firm the ability to tap into a certain percentage of revenues until the money has been repaid in full, as well as charge a fee of around 5-20%. The latter is determined based on daily cash flows and the small business’s abilities.
Andrew D’Souza, Clearbanc co-founder and chief executive, said nearly 1,000 small business owners have reached deals since the program launch. Many people view this option as better than traditional loans due to its more lenient requirements.
“We don’t think you need to risk your house and everything else if you’re trying to build a business,” D’Souza explained.
Facebook does not take a cut from the proceedings, though it sees the ongoing ties between the network and small businesses as beneficial.
“At Facebook, we are in the business of helping small companies become large and local companies become global,” explaind SMB North America director Katherine Shappley. “The Chrged program by Clearbanc provides an exciting opportunity for business to access they resources they need to grow.”
Sorry, comments are closed for this post.