Online small business lender OnDeck closed a $100 million asset-backed revolving credit facility with Pioneers Gate, the lending vehicle of a life insurance company managed by 20 Gates Management.
The new facility will provide a revolving funding period of four years, with an interest rate of one month LIBOR plus 2.00%. It will mature on October 13, 2022. The funds will be used to finance OnDeck’s term loans and revolving lines of credit.
Under the facility, loans will be made to a wholly-owned subsidiary of OnDeck, which will purchase small business loans from the parent company. This revolving pool of small business loans will serve as collateral under the facility. OnDeck is acting as the servicer for these loans.
“We are excited to complete yet another milestone transaction that increases our funding flexibility while reducing costs,” said Ken Brause, chief financial officer, OnDeck. “We are pleased that Pioneers Gate has chosen to support OnDeck and our mission of empowering the growth of small business through lending technology and innovation.”
