OnDeck Capital has announced new funding sources for its small-business lending units in Canada and Australia.
The online lender’s Australian division will use a revolving credit facility from Credit Suisse to refinance its existing loan book at a lower cost, as well as to fund future loan originations, according to a company press release Wednesday. The Australian facility will enable OnDeck to tap the equivalent of up to $55 million in U.S. dollars.
OnDeck Canada will rely on a revolving credit facility from Credit Agricole, which will provide the company with access to the equivalent of $19 million U.S. in committed capacity, plus the same amount at the lender’s discretion.
All part of the plan
The financing from two foreign banks “provide committed funding to support the loan growth of our international businesses” just as OnDeck’s financial plan intended, CFO Kenneth Brause says.
Both loan facilities are floating rate, have an initial weighted average interest rate of 5.6%, and are locally denominated, according to OnDeck. They will allow the online lender to guard against the risk of fluctuations in foreign exchange rates.
The loan facilities were arranged by Chief Financial Officer Kenneth Brause, who joined New York-based OnDeck in March.
“Securing cost-effective facilities that provide committed funding to support the loan growth of our international businesses reflects another step forward in the execution of our financing strategy,” Brause said in the release.
OnDeck, which lends money to many small businesses that would not qualify at a bank, has been operating in Canada since 2014, the same year that it held an initial public offering in the U.S. The firm set up shop in Australia in 2015.
The online lender has lent out more than $8 billion in the U.S., Canada and Australia since it was founded in 2007.This post was originally published here