What is the Platform Fee?
Capchase not only provides capital, but we pride ourselves on providing significant value to our customers such as dedicated Growth Advisors, personalized benchmarking, analytics, access to our Partner Hub exclusive content and events, and much more. The Platform is an integral part of what we do and doesn’t simply provide financing.
The Platform Fee provides our Grow customers with access to every feature on our platform for 90 days. While some companies opt to acquire these services individually, this approach ensures that, as a Grow customer, you have access to all that Capchase offers. While we previously only had a single Financing Fee, we introduced the Platform fee to reflect our growing set of products. For many customers, the Platform Fee does not change the total amount you pay, ensuring the best value.
Your all-in fees are the sum of the Financing Fee and the Platform Fee: if you’re comparing our cost to other providers it is helpful to think about all-in equivalent cost.
How does the Platform Fee work?
The platform fee is charged separately from your draw repayment schedules and is charged only when using the platform and actively drawing on your credit capacity. There is no impact on the amount of funding you receive from Capchase.
After the platform fee is incurred, the draw principal and financing fee will be repaid in installments, determined by the amount requested (principal), the term of the draw, and the draw schedule.
As an example, a Draw amount request of $100,000 at an all-in fee of 10% (8% Financing Fee and 2% Platform Fee) with a 12-month term would be structured as follows:
- Amount Requested: $100,000.00
- Amount Funded: $102,222.22
- Total to repay: $111,111.10
- Total Fees: $11,111.10 (10%)
- Platform Fee: $2,222.22 (2%)
- Financing Fees: $8,888.88 (8%)
The schedule will look:
| Name | Date | Principal | Financing Fee | Platform Fee | Total |
|---|---|---|---|---|---|
| Draw Amount | 01/01/2024 | $ 102,222.22 | +$ 102,222.22 | ||
| Platform Fee Debit | 01/07/2024 | $ 2,222.22 | -$ 2,222.22 | ||
| Installment #1 | 02/01/2024 | $ 8,518.52 | $ 740.74 | -$ 9,259.26 | |
| Installment #2 | 02/01/2024 | $ 8,518.52 | $ 740.74 | -$ 9,259.26 | |
| … | … | … | … | … | |
| Installment #12 | 02/01/2024 | $ 8,518.52 | $ 740.74 | -$ 9,259.26 |
Accounting Guidance for the Platform Fee
We recommend consulting with your financial and tax advisor(s) for financial practice and accounting specifics that are suitable to your business and the time-frame of the underlying transactions with Capchase.
While we recommend consulting with your accountant or financial advisor, many customers choose to treat the platform fee as follows:
- Book the platform fee as an operating expense and amortize the fee over the 90-day period. The platform fee will not create any net cash impact.
- The remaining implied discount related to the Grow Financing amount can be amortized over the draw term, coinciding with the monthly recognition of the financing fee as an expense on the P&L.
As a reminder, you can find a draw-by-draw principal and fee breakdown, and draw balances under Grow > My Draws.
You can also find an export with all the past and upcoming transactions in the All Transactions sections in the app.
If you have any questions, don’t hesitate to reach out to your Growth Advisor or support@capchase.com