An Australian marketplace lender has signed a non-binding Term Sheet with a major bank to establish a $20 million three-year loan sale facility.
Under the loan sale facility, DirectMoney would be able to sell eligible loans to the institution for three years.
The ASX-listed personal loan provider announced in a trading update last week it was entering into a “detailed due diligence and documentation phase” with an unnamed institution. It said the proceedings were expected to run for several weeks.
“Subject to the outcome of the due diligence, the parties will move towards the negotiation of specific terms regarding the loan sale facility,” the group said.
“DirectMoney is also in final Term Sheet negotiations with another major Australian financial institution regarding another, larger, loan sale facility which would provide similar ability for the company to sell eligible loans.”
DirectMoney CEO Peter Beaumont said the loan facilities were designed to provide capacity and the certainty the group needed to materially ramp-up its loan volumes.
“In parallel with these negotiations, we continue to promote and market the DirectMoney Personal Loan Fund,” Mr Beaumont said.
“The fund allows us to link investors with borrowers in an efficient manner and will play a critical part in the company’s medium- and long-term future.”
[Related: DirectMoney forced to turn away new business]