Salad Money lands £40m debt facility

The open banking-powered affordable finance provider is helping to unlock loans for key workers.

Social impact fintech Salad Money has just secured a new senior debt facility of up to £40m with a US-based credit fund.

Set up in 2019 as an ethical alternative to payday lending, Salad Money is a community development finance institute (CFDI) offering small-sum loans to key workers across the NHS and the public sector.

Using open banking and machine learning to assess affordability, Salad Money is able to offer loans of up to £1000 to customers who might be turned down by traditional lenders that rely on credit scores.

With the new funding, which Salad Money said “complements arrangements with existing funders”, the fintech will be able to meet the growing demand it has seen for affordable credit options.

“This new, committed facility brings our total senior debt funding to £50m and with it, the financial firepower to help more NHS and public sector workers avoid high-cost credit,” Salad Money CFO Phillip Hyett said.

“We see first-hand that demand for fair and affordable finance is increasing rapidly and we are delighted to lead the way in helping address this need.”

Around one-third of adults face difficulty accessing credit from mainstream lenders, and this is often because people are ‘credit invisible’ or have poor or low credit scores.

Customers through Salad typically save more than £335 in interest compared to alternative options, and the fintech offers tailored financial education, support and signposting to many applicants, regardless of whether it can offer them credit.

Salad Money is also a member of Responsible Finance, a network of financial inclusion-focused community lenders.

“This landmark deal for the UK’s community development finance sector is tremendous news for NHS and public sector workers who need and can afford to repay credit but don't have enough fair options available,” Responsible Finance CEO Theodora Hadjimichael said.

“Without CDFIs like Salad, they are locked out of access to finance and risk turning to providers who don’t prioritise their wellbeing.”