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OnDeck Announces Progress on International Pursuits

OnDeck's Canadian and Australian businesses have secured credit facilities that will allow for further expansion in the regions.

July 18, 2018 By Ryan Lichtenwald Leave a Comment

Views: 162

OnDeck has been one of the leaders in online small business lending for many years. What many people may not realize is that besides the US, OnDeck has operations in both Canada and Australia. Both regions were launched in 2015 and today OnDeck announced that they had secured credit facilities in both countries.

OnDeck secured an AUD75 million (~$55 million) asset-backed revolving credit facility with Credit Suisse for their Australian business and a CAD50 million (~$38 million) asset-backed revolving credit facility with Crédit Agricole.

The new Credit Suisse facility will allow OnDeck to refinance their current loan book at lower cost in addition to funding new originations. The facility in Canada is their first which is split into two parts, 25 million in committed capacity with the additional 25 million available at the discretion of the lenders. These facilities have a floating rate with an initial weighted average interest rate of approximately 5.6%.

As part of the press release, they also shared just how the businesses are structured with the credit facilities:

Under the respective facilities, loans will be made to a wholly-owned subsidiary of OnDeck Australia or OnDeck Canada, which will purchase small business loans from OnDeck Australia and OnDeck Canada, respectively. Each of the two separate revolving pools of small business loans will serve as collateral under its respective facility. OnDeck Australia and OnDeck Canada will act as the servicer for its respective loans.

Conclusion

As OnDeck has shifted their business to being less of a marketplace for investors it has become even more important to control their funding costs which we discussed in our OnDeck Q1 2018 earnings review. They must continuously be shopping for the best deal as a balance sheet lender which is demonstrated by their ability to refinance their loan book in Australia.

The other big take away from this news is that OnDeck is getting traction internationally. Many online lenders speak about the potential to expand globally, but few have taken the leap. OnDeck has already been in these markets for around 3 years and it will be interesting to follow how these businesses develop over the next few years.

Filed Under: Peer to Peer Lending Tagged With: Australia, Canada, credit facility, OnDeck, small business lending

Views: 162

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LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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