The platform will allow non-equity cash advances for Patreon users who need the extra boost for a more ambitious rollout of some kinds of content. The company has already made around a dozen of said loans to creators, Hot Pod said.
Patreon has raised $165 million overall, and it is unknown if the company will change its existing fee structure in lieu of the new system. The lending service could be a boon for Patreon, leveraging its existing customer base. It could also help Patreon hold onto content creators who might become successful enough to consider branching out on their own.
For content creators, the service will work by enticing them to use Patreon to keep building up their subscribers and fans. While many creators using Patreon won’t likely deliver venture-sized returns, repaying a loan would be a more feasible goal — if they can attain one, that is.
Patreon keeps records on startups that seem to be delivering, a luxury with which Facebook and YouTube likely don’t want to bother, with a number of influencers attempting to make it big on those latter two platforms. However, Patreon seems to think it’s worth a try to help content creators who are making money, and can deliver a return to the platforms they’re using.
Hot Pod reported that Patreon lent a cash advance of around $75,000 to Brooklyn-based podcast collective Multitude, intended to cover the production budget on its series. The collective is expected to pay it back in a slightly greater amount. As risk mitigation, the budget of another Multitude show, called “Join the Party,” will be used as collateral if the company can’t pay Patreon back.
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Multitude CEO Amanda McLoughlin said the project had been a good thing for the company because, as a small business, it kept running into the problem of having to choose between paying more people and saving up for bigger projects.
