A small business lender has closed an asset-backed revolving credit facility with a global bank worth $75million.
Under the facility, loans will be made to a wholly-owned subsidiary of OnDeck Australia, which will purchase small business loans from OnDeck Australia. The revolving pool of small business loans will serve as collateral under the facility. OnDeck Australia will act as the servicer for its loans
Cameron Poolman, chief executive officer OnDeck Australia, acknowledged the role of Credit Suisse in supporting OnDeck’s mission to power the growth of small business through lending technology and innovation.
He said, “Our focus on developing customer-centric and innovative products for the benefit of small businesses in Australia depends on many factors including increasing our access to funding through world-class financing partners like Credit Suisse.
“Our new facility is testament to our parent company’s reputation and the strength of its international business, and of our ability to leverage its legacy of industry expertise and knowledge.
“The online small business lending market in Australia has been growing at a faster rate than the US market did at a similar stage of development. We believe there will be a flight to trusted and quality providers.
“We expect to see fewer, stronger players as the Australian market consolidates over time. OnDeck Australia aims to be part of that market. We have the right strategy to prudently build our business well into the future and the important support of key partners like MYOB help us in achieving this objective.
“Success for OnDeck Australia will be achieved by lowering our cost of funding, operations and originations and building the leading credit model.
“That success is naturally embedded within a culture of good governance learned from our parent and supported locally with the continuing development of strong industry compliance through initiatives like our newly-signed ‘Code of Lending Practice’ and adoption of pricing disclosure tools like the SMARTBox.”
Noah Breslow, CEO of OnDeck Capital, said, “OnDeck’s global mission is based on scaling our international operations towards market leadership while responsibly serving small business owners with efficient, online access to financing.
“Today’s announcement marks another milestone in our ability to deliver on that mission across Australia and is testament to the strength of OnDeck's business model. Most importantly, it is strong validation of our Australian business and its ability to stand on its own just three years after inception.”
OnDeck has also announced a similar funding arrangement of CAD50 million with Credit Agricolé for the OnDeck Canada business, with half fully committed and half available at the discretion of the lenders.
Poolman added, “While small business accounts for a significant proportion of the Australian economy and employs over 70% of the workforce, small businesses face the universal problem of accessing capital to grow.
“The Australian economy can’t afford to have a credit gap and to have small business waiting on capital. Building a level playing field in terms of access to capital and data is imperative for the future of Australia’s small business economy, our future as an innovation nation and reputation of Australian financial services as best in class.”
