Capchase Launches Deposit Account to Help Startups Unlock Low-Cost and Efficient Capital

Rhea-AI Summary

Capchase has launched Capchase Earn, enabling companies to earn a 3% return on idle cash, designed to significantly reduce the overall cost of capital. This innovative product supports businesses by turning venture capital into a productive asset, extending their financial runway. FDIC and DIF insure funds beyond $250K, enhancing security for US clients. For instance, a $3M deposit can unlock $2M in financing at a 1.5% discount rate. This offering aims to reshape startup growth strategies by allowing companies to focus on building, not just fundraising.

Positive

• Launch of Capchase Earn offers a 3% return on idle cash, improving capital efficiency.
• FDIC and DIF insurance coverage extends client funds protection beyond $250K.
• Combining Capchase Earn with other financing options can significantly reduce total capital costs.
• Capchase Earn enables startups to maximize available funds for growth without diluting ownership.

Negative

• The 3% return rate is subject to change based on borrower profile, creating potential uncertainty for clients.

New Capchase Earn product allows companies to earn 3% on funds, providing the opportunity to generate a meaningful return on idle cash and significantly extend their runway.

NEW YORK--(BUSINESS WIRE)-- Capchase, a New York-based provider of non-dilutive capital for recurring-revenue companies, announced today that it has launched Capchase Earn™, an innovative account for fast-growing companies that generates 3% return and is designed to significantly reduce the overall cost of capital. A first-of-its-kind solution, the latest product offering will support Capchase’s mission of accelerating growth for high-potential businesses through better financial products.

Capchase Earn Calculator (Photo: Business Wire)

Capchase Earn is designed to help startups fuel their growth and stay in control, by enabling otherwise idle cash, such as venture capital funding, to grow at an extremely competitive rate of 3%. For US-based customers, every dollar is protected with FDIC and DIF insurance, even above the standard $250K amount covered by FDIC.

When funds are combined with other Capchase financing products, companies are able to significantly reduce their total cost of capital: Capchase Grow brings a company’s revenue forward to today, while Capchase Extend smooths out the repayment of large expenses. For example, depositing $3M in Capchase Earn would unlock $2M of Capchase Financing at a 1.50% discount rate.

Miguel Fernandez, Co-founder and CEO of Capchase commented: “Capchase Earn is going to change the way companies grow forever. By combining this account with our other revenue financing products, a company raising a round for 18 months of runway can now go 2.5 times longer without slowing down for a negligible cost. This is a game changer for the startup community and is yet another way Capchase is working to help startups focus on building and growing first, not fundraising.”

Diego Coria, Global Finance Manager at Nowports, a customer who took part in the product beta for Capchase Earn, said “Capchase Earn was a great option for us because the return helped us make use of the capital we didn’t immediately need. When you raise funding, you have a lot of money sitting idle in your bank. You need to take action with that money, so that it starts producing.”

Capchase was launched in 2020 to help recurring revenue companies secure growth capital that doesn’t dilute their founders’ ownership. By working with Capchase, companies can unlock cash that is otherwise tied up in future subscription based payments, allowing founders to either reinvest the upfront capital in profitable growth initiatives, or secure cash on hand to extend their runway. Additionally, Capchase also offers an expense financing solution that allows large expenses to be split over time in fixed repayment terms. When combined with Capchase’s leading programmatic funding solution, companies can realize faster growth while at the same time preserving their cash.

As part of this launch, Capchase has partnered with BankProv, a future-ready commercial bank that offers adaptive and technology-first banking solutions to emerging markets, to provide the banking services. The 3% is subject to change based on borrower profile.

To learn more about Capchase, and sign up for Capchase Earn, please visit www.capchase.com.

About Capchase

Capchase is a platform for recurring revenue companies to secure non-dilutive capital. Founded in 2020 and based in New York, the company provides financing by bringing future expected cash flows to the present day, thereby extending an immediate line of credit. Companies that work with Capchase are able to secure funding that is fast, flexible, and doesn't dilute their equity.

About Bankprov

BankProv, legally operating as The Provident Bank, is a subsidiary of Provident Bancorp, Inc. (NASDAQ: PVBC). BankProv is a future-ready commercial bank for corporate clients, specializing in offering adaptive and technology-first banking solutions to niche markets, including cryptocurrency, renewable energy, fin-tech, and enterprise value lending with a focus on search fund loans.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005754/en/

Media:

Ryan Walker

R.J. Walker & Co.

ryan@rjwalkerco.com

860-930-3611

Source: Capchase

FAQ

What is Capchase Earn and how does it benefit companies?

Capchase Earn is a new account that allows companies to earn a 3% return on idle cash, helping them generate returns on unused funds and extend their financial runway.

How does Capchase Earn affect the overall cost of capital?

By offering competitive returns on idle cash, Capchase Earn can significantly reduce the overall cost of capital when combined with other financing products.

Is the money deposited in Capchase Earn secure?

Yes, the funds are protected by FDIC and DIF insurance, even for amounts exceeding $250K for US customers.

What kind of companies can benefit from Capchase Earn?

Capchase Earn is designed for fast-growing, recurring revenue companies that have idle cash from funding rounds.

What is the maximum financing available through Capchase Earn?

Depositing $3M in Capchase Earn can unlock up to $2M in Capchase financing at a 1.5% discount rate.

What is the stock symbol for Provident Bancorp?

The stock symbol for Provident Bancorp is PVBC.