By: Caitlin,

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Clovest is a new funding platform designed to help small businesses raise capital for small to medium-sized projects. Funders of projects not only get to help their favorite businesses and community grow, but can get repaid for their contributions on a quarterly basis.

Clovest recently wrote a blog post breaking down the fee structures between the two platforms they use, PayPal and Dwolla. They compared costs on things like investment sizes and fees on repayments. There’s a ton of great information in their post, but here’s an overview of an example they gave.

A business is raising $12,000 from 100 people with the following breakdown:

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If each of these 100 pledges were given via PayPal, at 2.9% + 30 cents a transaction, the total taken in interchange fees would be $378. If each of these pledges were given via Dwolla, the total taken in fees would be $25. That’s a difference of $353.

Remember – each investment will be repaid on a quarterly basis. In this example you will see how much of the total capital gain is lost due to interchange fees, from the initial funding to the 4th, 8th and 12th quarter repayment schedules.


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If you are on a 12 quarter repayment schedule and using PayPal, you are spending 5.15% of your capital gain on fees, as compared to Dwolla’s 0.71%. That’s a total savings of $533 on a $12,000 capital raise. That’s a considerable amount of money to throw into the dark black hole of interchange.

“With Dwolla, we have been able to build a service that allows businesses to raise money and, most importantly, repay raised funds, at a reasonable cost.” –

Check out what Clovest can do for you, or run your own numbers using their Fee Comparison spreadsheet



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Financial institutions play an important role in the Dwolla network.

Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.