Patreon is now issuing microloans to select content creators

Shawn Knight

TechSpot Staff
Staff member

Patreon Capital is an alternative financing service that provides cash advances to creators in exchange for “a slightly greater sum of their future income generated on Patreon.” In other words, it’s a loan with interest, although just how much interest is attached wasn’t mentioned.

Brooklyn-based podcast collective and production studio Multitude tapped Patreon Capital for a cash advance of around $75,000 according to a recent report from Hot Pod. The team has two years to pay the money back and had to put up future Patreon revenues from another Multitude show as collateral in the event they can’t pay.

Patreon believes it is in a better position than a bank to make a decision regarding a loan because they have a creator’s entire history on the platform at their disposal. They know about your earnings history and how engaged you are with your supporters. Decisions one way or another could come quick, and that would be helpful if time is of the essence.

Patreon Capital also gives the platform another stream of revenue which, when running a business, is critical. But is this really there to benefit the consumer? I suppose that depends on what school of thought you subscribe to.

Aside from purchasing a home, I’m personally averse to the idea of borrowing money. As the saying goes, the borrower is slave to the lender. In the example stated above, Multitude was able to put up future revenue from another podcast as collateral. But what about other creators that may only have a single channel up on Patreon? Will they have to put it up as collateral? What happens if a creator misses a payment or two – will Patreon take down their account, further impacting their ability to earn a living?

Masthead credit: Tip jar by nutcd32. Delinquent loan by Vitalii Vodolazskyi.

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Evernessince

地獄らしい人間動物園
"a slightly greater sum of their future income generated on Patreon"

Too vague to judge but you'd have to assume at the very least that the amount being taken is going to include the amount borrowed plus extra on top. It just depends on how much. Patreon is a US company which means it has a lot of leeway it regards to predatory loans. Heck is some states you can even put people in jail for their debts.
 
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Plutoisaplanet

TS Maniac
I can see content creators relying on this in the dry months for advertising, aka at the beginning of the year. For those who mostly rely on advertising, it could help stabilize their income. But it's so niche of a market, I don't understand how it's worth it.
 

Evernessince

地獄らしい人間動物園
I can see content creators relying on this in the dry months for advertising, aka at the beginning of the year. For those who mostly rely on advertising, it could help stabilize their income. But it's so niche of a market, I don't understand how it's worth it.
I'm not sure what you are referring to when you say niche. If you are talking about Patreon as a whole, they have paid out more then 1 Billion USD to creators.
 

TheBigT42

TS Guru
"a slightly greater sum of their future income generated on Patreon"

Too vague to judge but you'd have to assume at the very least that the amount being taken is going to include the amount borrowed plus extra on top. It just depends on how much. Patreon is a US company which means it has a lot of leeway it regards to predatory loans. Heck is some states you can even put people in jail for their debts.
You cannot go to prison for failing to pay for a “civil debt” like a credit card, loan, or hospital bill. You can, however, be forced to go to jail if you don't pay your taxes or child support. ... In that way, if you fail to pay these fines, you may go to jail.
 

Evernessince

地獄らしい人間動物園
You cannot go to prison for failing to pay for a “civil debt” like a credit card, loan, or hospital bill. You can, however, be forced to go to jail if you don't pay your taxes or child support. ... In that way, if you fail to pay these fines, you may go to jail.
And yet it is happening

https://www.cbsnews.com/news/coffeyville-kansas-medical-debt-county-in-rural-kansas-is-jailing-people-over-unpaid-medical-debt/

Whether you can or can't go to jail depends on the judges. Given that Trump is appointing completely incompetent judges (as rated by peers) to high positions that they don't have the experience for, I'm willing to bet this sort of thing will become more common.

The constitution might as well be toilet paper at this point the way it's being used.
 

jpuroila

TS Booster
Patreon isn't EMPLOYER, Patreon is PAYMENT PROCESSOR(that also happens to provide some other services). Important distinction, since employees actually have rights(granted, US employees typically don't have very many of those, but still).
 

Evernessince

地獄らしい人間動物園
"went to jail for failing to appear in court " not for being in dept.
At least quote the whole sentence

"Tres Biggs went to jail for failing to appear in court for unpaid medical bills. He described it as "scary. "

You do not go to jail for not appearing in civil proceeding (just ask all the companies that fail to appear in court for smaller lawsuits against them). Medical debt SHOULD be a civil proceeding and yet you have people going to jail for not showing up to what should be a civil case.

So yes, in fact people ARE going to jail for their medical debt.