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Plenti sets up $100m green warehouse facility

The fintech lender has secured a second warehouse facility for renewable energy and personal lending.

Plenti has established a second warehouse funding facility worth $100 million to support growth and drive scale in renewable energy and personal loan originations.

The new facility will support the growth of Plenti’s lending activities while Plenti expects that the warehouse facility would reduce the cost of funds by around 300 bps on originations funded from the new facility.

The announcement has followed the lender flagging the move in its half-year results for the six months ended 30 September 2020. It had said that it had begun discussions during the half with banks and mezzanine funders about a second warehouse facility to fund renewable energy and personal loans.

The non-bank lender said that it expects the majority of new renewable energy and personal loan originations to be funded by the new facility, while its marketplace platforms continue to act as sources of capital and funding diversification.

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The initial facility size of $100 million has been set to provide an appropriate balance between funding capacity and cost. As the loan portfolio increases in scale, Plenti expects the facility to be upsized, subject to funder approval, it said.

The facility has an 18-month availability period and has a funding cost of around 3 per cent per annum on a fully drawn basis, which Plenti said is considerably lower than its existing funding sources for renewable energy and personal loans.

The warehouse facility has a maximum 5 per cent equity funding requirement.

The establishment of the new warehouse facility takes Plenti’s total warehouse funding program to $375 million.

Commenting on the new warehouse facility, Plenti CEO and founder Daniel Foggo said Plenti’s renewable lending business has funded over 11,000 loans for solar power purposes worth $100 million in loans since inception, which the lender has estimated equates to a total carbon abatement of over 700 tonnes of greenhouse gases over the system’s lifespan.

“There is growing demand for our renewable energy and personal loans,” Mr Foggo said.

“Clean energy should be the new normal, and we are working tirelessly to empower consumers to embrace new energy technology. This kind of warehouse facility will make our affordable finance available to tens of thousands of new customers.

“Mass adoption of clean energy is critical to Plenti’s future. Solar power, in particular solar batteries, allows households to be self-sufficient from the energy grid. Solar batteries also empower home owners to achieve sustainable financial independence through low energy bills. Supporting Australians make the switch to green energy just makes sense.”

A major domestic bank is providing senior funding commitment to the warehouse, and is joined by two domestic institutional investors providing mezzanine finance.

Commenting on the funding support, Mr Foggo said: “It is fantastic to have received further support from our bank funding partners and introduce two new investors to our warehouse funding program. We appreciate their shared commitment to helping to support our environment by helping Australians finance the purchase of new energy technologies such as solar panels and home batteries.”

Plenti has also announced that documentation has been completed to upsize its secured automotive loan warehouse facility from $150 million to $275 million.

The upsize has followed the lender receiving credit approvals to increase the size of its automotive warehouse facility and extend the maturity of the facility on similar terms in November 2020, subject to legal documentation.

The lender’s first warehouse, which was set up to fund secured automotive loans, had an initial facility size of $50 million at the start of 2020, but was upsized in July, August and again in November.

[Related: Plenti loan originations hit $1bn]

Plenti sets up $100m green warehouse facility
Plenti sets up $100m green warehouse facility
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