LiftForward has secured up to $250m in credit facilities, courtesy of GLI Finance and Varadero Capital – the former of which has been a shareholder in the platform since mid 2014. As part of the new deal, Varadero now holds rights to acquire equity in the company. The $250m will be used to accelerate the growth of LiftForward's small business lending operations.
LiftForward operates in much the same space as the publicly listed OnDeck. The platform provides multiple small business funding products, from working capital to purchase order finance. The capital comes from a range of hedge funds and asset managers, which participate in an exclusively institutional marketplace. LiftForward now has the capacity to play within its own marketplace, thanks to the fresh injection of $250m. LiftForward’s credit assessment process is technology-centric. The platform’s proprietary credit models are designed to delve deeper into the financial health of a business than traditional methods of appraisal. And, of course, LiftForward prides itself on speedy decision making.
LiftForward has reportedly witnessed a surge in loan requests over the past couple of months, which has seemingly prompted the $250m deal. Jeffrey Rogers, CEO of the platform, offered his take on the news:
“Banks continue to abandon the under $1,000,000 loan product. When you combine this supply cutoff with the expanding demand for capital from small businesses, there is significant need for our product. This transaction allows us to further meet the demand we are receiving and welcome an award-winning hedge fund manager, Varadero, to our syndicate.”
Varadero made the headlines in April after announcing its participation, alongside Lending Club and Citi, in a $150m programme to make credit more affordable for low and moderate income families.
The good folk of GLI Finance will be thrilled. The $250m facility is beyond doubt the largest transaction to have been secured by one of its portfolio companies – which between them occupy 8 distinct tracts of the alternative finance space. SME lending specialist The Credit Junction won a $50m facility from Victory Park Capital in May. It would appear that GLI has discovered something of a sweet spot in the form of US working capital providers.
Geoff Miller, Chief Executive of GLI Finance, summarised:
“Since we invested in LiftForward, its business proposition has become ever more relevant as US banks continue to withdraw from SME lending. I am delighted that we can provide further support to LiftForward and, in turn, expand our exposure to the US market.”
