Online Lenders

Kabbage closes $700 million securitization, the largest by a small business lender

  • Securitization is an important step in growing a lender.
  • Automation plays a big role in Kabbage's growth.
close

Email a Friend

Kabbage closes $700 million securitization, the largest by a small business lender

Kabbage has completed the largest securitization by a small business online lending platform. The most senior class of the debt also received the highest ABS rating earned by a small business online lending platform for a three-year facility.

Why this matters: Selling off debt to institutional investors is an important step in the maturation of a lender. First, a startup lender must find ample funds to be able to lend out. Once they’ve achieved certain scale, they’ll look to outside investors to buy these loans, removing them from their own balance sheets. Securitization transfers risk from the lender to an outside investor.

Kabbage keeps growing: To date, the company has helped more than 170,000 small businesses access over $6.5 billion in funding.

Kabbage CEO and co-founder Rob Frohwein recently said on a Tearsheet webinar that the company has increased the lines it offers SMBs by 20x since it launched and continues to automate much of the underwriting process. Partnerships have also played an important role in Kabbage’s growth.

“The new transaction positions the company for continued milestone growth as small businesses accessed more than $2 billion through Kabbage last year and more than $600 million already in the first quarter of 2019,” said Kabbage CFO Scott Rosenberg.

0 comments on “Kabbage closes $700 million securitization, the largest by a small business lender”

Member Exclusive, Online Lenders

Lending Briefing: Debit cards are taking over

  • This year, debit cards have emerged as the preferred payment method for the majority of US consumers, dethroning credit cards.
  • Younger generations are behind this switch – even though they're also getting credit cards, Millennials and Gen Zers prefer to pay with debit.
Iulia Ciutina | September 28, 2022
Member Exclusive, Online Lenders

Lending Briefing: SaaS SMB lending competition heats up as more fintechs enter the market

  • More fintechs are coming into the US market to offer banks solutions that digitize and streamline their SMB loan application and decisioning process.
  • As this segment of the market is drawing more interest, we sit down with Ranqx to delve into its strategy of scaling in the US market.
Iulia Ciutina | September 14, 2022
Online Lenders, Sponsored

Without the right data, your bank could be turning away qualified borrowers

  • Using alternative data provides a more holistic view of a consumer's creditworthiness.
  • Financial services expert Gary Harvey explains how FIs can achieve this using the right data sets.
Equifax | August 23, 2022
Member Exclusive, Online Lenders

Lending Briefing: Gen Z is expanding the credit market

  • The US credit card market continues to grow: the number of credit cards topped 500 million for the first time ever at the end of Q2 2022.
  • Younger generations are behind the increase, experts say, as more Gen Zers start their credit journeys.
Iulia Ciutina | August 17, 2022
Member Exclusive, Online Lenders

Lending Briefing: The digital lending fintechs attracting capital in a down market

  • Funding is down across the fintech sectors compared to last year, with less capital going to big segments like payments, baking, and lending.
  • We are taking a look at some of the digital lending fintechs that still secured financing in this past quarter, in spite of the down market.
Iulia Ciutina | August 03, 2022
More Articles