The fintech lender, which first launched into the Australian small business lending space in 2008, has announced that it has secured the multi-million dollar credit facility from the investment bank to “accelerate the growth of its lending business to Australia’s small and medium-sized enterprises (SMEs) through its business loan and merchant cash advance products”.
Speaking to Mortgage Business, Capify CEO and founder David Goldin revealed that the facility would help the lender increase its current distribution channels, including its broker partnerships, as well as potentially roll out other products to fulfil the needs of its SME clients.
Mr Goldin said the “landmark achievement” in securing the finance from Goldman Sachs was testament to the fintech’s track record.
He said: “This Goldman Sachs transaction taking place is very exciting. It goes without saying that Goldman Sachs is one of the premiere names in the world when it comes to capital providers, and the transaction was done over the course of almost 12 months.
“What makes us excited is that Goldman Sachs doesn’t lend to anybody, they really did their diligence on our business model, the performance of our portfolio, the management team, our compliance and really our responsible lending. [You need that] to be associated with Goldman Sachs.”
He continued that the new facility could enable the lender to roll out new products, stating: “Right now, we have two products. Our business loan was the first in Australia to emulate the model from the United States.
“Unlike a traditional business loan where the business owner has to make one payment a month to a bank, our experience has been that business owners sometimes have challenges managing their own cash flow.
“So, our products have small daily micro repayments. We found that customers like that because it is less pain on them, they know it is just a small amount coming out of their checking account every day.
“We also have the merchant cash advance product... [where] we take a percentage – not a fixed amount – every day of their takings.”
He continued: “We are, with the Goldman Sachs facility and just in general, also looking to roll out other products to our customers based on our surveys that we roll out where we ask what other financial service products we can offer them.”
Mr Goldin added: “We’re very excited about the opportunity and we’re very proud of our company. We’ll be now looking to increase our distribution channels to deploy all this capital.”
John DeBree, Capify’s managing director for Australia, added: “The credit facility will enable us to continue on our growth trajectory while offering even more attractive and innovative solutions to thousands of small businesses in need of capital.”
Pankaj Soni, executive director at Goldman Sachs Private Capital, said: “Capify is one of the leading SME finance providers in Australia.
“We have been impressed with the management team, business model and innovative finance solutions for SMEs. We look forward to supporting their growth in the years ahead.”
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.