Wisr warehouse facility upsized to $250m

Wisr has announced that its warehouse loan funding facility has been increased to $250 million, subject to finalisation of legal documentation.

Wisr first announced that it had secured an initial $50-million debt warehouse facility from National Australia Bank (NAB) in October 2019 to support the scaling of its personal loan originations.

The debt warehouse program became live and operational in November 2019 (Q2FY20) and had the potential to upsize to $200 million, with a possible extension of the two-year period.

The warehouse facility was set to triple the average margin to Wisr compared with current loan unit economics.

For its new funding facility, the neo-lender received support from NAB and mezzanine funders, together with the recently announced funding from the Australian Office of Financial Management (AOFM).

According to Wisr, the AOFM provided $55.2 million in funding for this loan funding facility.

The AOFM approved an initial investment of $30.8 million into Wisr’s warehouse earlier this year through the Structured Finance Support Fund, which formed a part of a $15-billion investment fund announced by the federal government to enable smaller lenders to continue to lend to small businesses and individual customers throughout the coronavirus pandemic.

According to Wisr, under its warehouse funding model, the company has achieved core cash flow profitability in the second half of the 2020 financial year, delivering improved unit economics and operational leverage, including 358 per cent revenue growth in the first quarter of the 2021 financial year.

Speaking to Mortgage Business on the funding facility, Wisr chief financial officer Andrew Goodwin said: “The Wisr warehouse is the go-forward funding source to improve Wisr’s revenue growth, operational leverage, path to profitability and our underlying loan unit economics, further enhancing Wisr’s strategy to redefine and reinvent what a consumer lending company can be.”

The loan funding facility allow scope for Wisr to develop new lending products such as its secured vehicle product, while also supporting the scaling of its personal loan originations, Mr Goodwin added.

The neo-lender, which aimed to triple the average margin to Wisr compared with current loan unit economics, said it achieved this goal when the program went live.

“The economics flow through over the life of a loan (average of four years),” Mr Goodwin said.

Commenting further on the deal, Mr Goodwin said: “The outstanding performance of the Wisr loan book, and our market-leading ability to attract Australia’s most creditworthy customers as demonstrated by our 90+ day arrears of 1.01 per cent, makes Wisr’s loan receivables highly sought after in the market.”

“Through the strong support from our funders, in less than a year of the Wisr warehouse going live, we have delivered 215 per cent growth in quarterly revenue (Q1FY21 versus Q2FY20), rapidly scaled our personal loan originations quarter-on-quarter and entered the $33-billion vehicle finance market in Q1FY21 via our new secured vehicle product.

“The compelling loan unit economics underpinned by the Wisr warehouse has us well placed to continue rapidly growing our loan book while maintaining strong credit metrics.”

[Related: Wisr makes two executive appointments]