Kabbage announced it closed a revolving, three-year, $270 million credit facility. Top-tier institutional investors participated in the initial debt round, which was oversubscribed. Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners, acted as sole structuring and placement agent as well as administrator.
The new financing is one of the largest credit facilities ever raised in the small business lending sector and will provide Kabbage with dramatically lower cost of funds. It will also provide the company with more flexibility to expand its product structure and enable Kabbage to scale more rapidly to reach more small businesses.
“This inaugural debt financing for Kabbage represents the first securitization of MCA and related products to be distributed to capital markets investors,” said Matthew Perkins, senior managing director and head of ABS and RMBS Banking at Guggenheim Securities. “There is growing investor demand for asset backed investment opportunities from market leading, technology and data-driven small business loan originators.”
Since launching to customers in May 2011, Kabbage’s painless application process, real-time underwriting and relentless focus on providing service that is unmatched in the financial services industry, have made its service highly attractive to small businesses. Kabbage has advanced over $250 million to small businesses in fewer than three years in operation, making it the fastest growing company in small business lending. Today’s announcement comes only one year after Kabbage announced a $75 million credit facility in April 2013.
“Today’s news is a powerful testament to Kabbage’s seamless approach of delivering funding to businesses without the hassle common in traditional small business financing,” said Kevin Phillips, CFO, Kabbage. “We are incredibly proud to have served so many small businesses over the last three years and will leverage the scale and flexibility of this credit facility to further revolutionize access to capital for small businesses everywhere.”
Atlanta-headquartered Kabbage pioneered the first financial services data and technology platform to provide small businesses financing in as few as seven minutes.