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”

Online Lenders

Mission Lane’s approach to helping people access credit with Shane Holdaway

  • Shane Holdaway spent close to two decades working in large traditional financial institutions.
  • As CEO of Mission Lane, he's serving a million customers that banks tend to overlook.
Zachary Miller | July 30, 2021
Member Exclusive, Online Lenders

How Shopify is creating an ‘embedded finance ecosystem’ with Shopify Capital

  • Shopify merchants benefit from a quick, simple application and approval process.
  • Shopify is slowly building an arsenal of finance solutions to better serve its users.
Shehzil Zahid | June 10, 2021
Member Exclusive, Online Lenders

‘Fix the errors and a lot more people will flow through the system’: The credit ecosystem may need a makeover

  • Credit invisibility is still very much alive in the U.S.
  • But it may not be just one problem within the system that’s causing the mess. Rather, it could be the whole system.
Rivka Abramson | June 07, 2021
Member Exclusive, Online Lenders

Through software, Drummond Community Bank moves into personal and auto lending

  • The bank will provide its customers with AI-powered personal and auto loans.
  • AI-based lending platforms can give community banks a competitive advantage over larger banks.
Ismail Umar | May 10, 2021
Member Exclusive, Online Lenders

With the cannabis market set to double, lenders hope to capitalize on the opportunity

  • Financing in the space typically has come in the form of equity investments.
  • Federal deregulation would give more lending options to cannabis businesses.
Shehzil Zahid | May 05, 2021
More Articles