Patreon will now offer creators cash advances on their subscription money


Patreon, the site creators love because it helps them make money from their work, has started a program called Patreon Capital, which provides micro-loans to creators. Essentially, it’s a cash advance: you get money now in exchange for a portion of your future income plus a small bonus. This is different from the usual Patreon business – which allows direct subscriptions to people whose jobs you love, and then cut the top – but it will diversify the company’s revenue, which should make Patreon a bigger business. sustainable.

As Nick Quah’s Hot Pod newsletter reports:

[G]Given their history and positioning as a platform to support creators, Patreon believes it is better positioned than banks to provide creators with the commercial support they need. “After all, Patreon has access to all the data on a designer’s income history, what he offers as perks, how much he engages with his clients…” said Carlos Cabrero, vice -president of the company’s finances. “It would be essentially impossible to replicate for a bank.”

A Patreon creator’s historical performance – in terms of followers and revenue – is certainly more transparent than a credit report. And as Quah astutely notes, the program is modeled after other similar offerings from Shopify and Stripe.

But that is not the reason the program was launched. Patreon Capital exists because Patreon itself is a business, paying a significant portion of the money it makes to the people who populate its platform. “The reality is that Patreon needs to create new businesses, new services and new lines of income in order to build a sustainable business,” the CEO of the company said in an interview last year, a year in which she paid more than half a billion dollars to its creators. .

Every business is different, but they all have the same blood: money. (It’s just another way that companies aren’t really the same as people, no matter what Citizens United says.) Like all other companies, Patreon has to find its way to sustainability, just like every other creator. of its platform. In other words, Patreon needs more blood, which means it’s probably best to view Patreon Capital as a necessary transfusion.

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