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.
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.

Online Lenders

Al Goldstein on Avant’s move into powering digital lending for banks with Amount

  • Avant started six and a half years ago in consumer lending and has transacted over 1 million times.
  • The company is spinning off Amount, its B2B digital lending platform.
Zack Miller | September 13, 2019
Online Lenders

Alternative data gets a thumbs up: Update on the CFPB’s first no-action letter

  • The CFPB published more information about the use of alt data in credit decisioning.
  • The results are positive for lender Upstart and for the industry in general.
Michael Deleon | September 06, 2019
Online Lenders

A deeper look into the payroll advance industry

  • Along with 10 other states, New York is looking into the payroll advance industry.
  • Branded as a kinder, gentler version of payday lending, it's possible that the industry's tipping model is more than it seems.
Paige Stern | August 13, 2019
Online Lenders

‘We call it Dream Fuel’: Behind the growth of PayPal’s SMB lending business

  • PayPal is scaling its SMB lending business and its program recently surpassed $10 billion.
  • svp of credit Darrell Esch joins the podcast to talk about where the business is headed.
Zack Miller | August 07, 2019
Online Lenders

Affirm’s Max Levchin: ‘Walmart doesn’t get enough credit for its customer focus’

  • Walmart has recently rolled out Affirm's POS financing broadly in its stores.
  • CEO and founder Max Levchin sat with Tearsheet to talk about the state of the business.
Zack Miller | June 21, 2019
More Articles