MoneyMe establishes new $167m warehouse funding facility led by Westpac
By Edil Corneille
Australia’s digital consumer credit business MoneyMe announced today the establishment of a new warehouse funding facility led by Westpac. The initial facility funding amount has been set to provide an appropriate balance between funding capacity and cost. It is anticipated that the amount will be increased significantly over time in line with loan asset growth.
In an announcement, the company mentioned that the new facility with a two-year term is a significant reduction in warehouse funding costs of below 3.95 per cent p.a (+BBSW) on a fully drawn basis, taking the combined warehouse loan asset funding costs to below 5 per cent p.a (+BBSW), (down from 11.4 per cent in FY20).
The facility has been initially established with Westpac and MoneyMe. The AOFM provided approval for mezzanine funding into the facility in September, via the Structured Finance Support Fund (SFSF), with funding subject to completion of legal documentation. The new warehouse facility is expected to include AOFM mezzanine funding in October or November, following the completion of legal documentation.
Clayton Howes, MoneyMe’s Managing Director and Chief Executive Officer said, “This major Australian bank partnership is transformative for MoneyMe, paving the way for substantial scale into the future. This is a significant milestone that provides a step change in our funding costs, increases origination capacity and allows us to better compete on price. It is an achievement made despite the Covid-19 operating environment and is testament to the business model, the economics and quality of the loan assets and the growth opportunity. We welcome Westpac as a senior funding provider and look forward to having the AOFM as a mezzanine debt investor.
The launch of PayAnyone for our Freestyle virtual credit account is another exciting innovation to delight our customers. It is also fantastic to see our recent product launches from ListReady to MoneyMe+ resonate with customers so quickly. We are looking forward to fully leveraging the lower cost of funds and capacity from the new warehouse funding facility to grow our balance sheet to meet the needs of Generation Now.”
MoneyMe leverages its technology platform (the Horizon Technology Platform) and big data analytics to deliver loan offerings to tech-savvy consumers. Founded in 2013, it originates consumer loans through its risk-based lending platform to consumers seeking access to credit directly from their mobile devices.
The technology platform of the company allows applications to be completed within approximately five minutes and funds to be disbursed, or credit limits to be available, to the customer shortly after approvals.
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