OnDeck Australia secures $75m Credit Suisse loan

Small business lender OnDeck Australia has secured a $75 million funding line from Credit Suisse, the latest partnership between fintech players and established institutions.

The subsidiary of the New York-listed OnDeck Capital said the asset-backed revolving credit facility would be used to refinance OnDeck Australia’s loan book and to fund new loans. The facility is due to mature in June 2020.

On Deck Australia managing director Cameron Poolman said the lender was striving to lower its cost of funding, origination and to build a “leading credit model”.

He said the online small business lending market is growing at a faster pace than it did in the US at a similar stage in its development.

OnDeck Capital listed on the New York Stock Exchange in January 2015. The lender’s shares are trading 70 per cent below its initial public offer price as the sector has struggled to achieve profitability. However, the stock has gained 28 per cent in 2018 and has a market capitalisation of $US540 million.

OnDeck chief executive Noah Breslow had previously told Wall Street analysts the company was achieving strong growth rates in international market.

Its Canadian subsidiary also announced a funding arrangement similar to the Australian operation. French bank Credit Agricole will provide $C50 million of funding to the lender, with half the funds fully committed and half available to draw by lenders at their discretion.

According to regulatory filings, the combined floating rate facilities achieved a blended cost of funds of 5.6 per cent.

OnDeck is one of several new fintech entrants in the Australian small business lending sector along with Prospa, Moula, OnDeck, Get Capital, Capify and Spotcap.

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Source: OnDeck Australia secures $75m Credit Suisse loan | afr.com