Fintech lender OnDeck created a new ABL division with a $100 million facility agented by Ares Agent Services. The new unit, OnDeck Asset Funding, is a wholly-owned subsidiary of OnDeck Capital. Wells Fargo served as paying agent for the transaction.
Under the OnDeck Asset Funding I facility, the lenders commit to make loans to ODAF I, the proceeds of which are used to finance ODAF I’s purchase of small business loans from the company. The revolving pool of small business loans purchased by ODAF I serves as collateral for the loans made to ODAF I under the ODAF I facility. ODAF I is required to repay the borrowings from collections received on the loans.
The company’s ability to utilize the ODAF I facility is subject to ODAF I’s compliance with various covenants and other requirements of the ODAF I credit agreement. The failure to comply with such requirements may result in events of default, the accelerated repayment of amounts owed under the facility, often referred to as an early amortization event, and/or the termination of the facility.