Aura, a community development financial institution that provides cost-friendly loans to families, has completed a $50 million private social bond issuance, the company announced on Thursday (Mar. 21).
The money from the issuance will allow for 32,561 credit-building loans to what the company calls underserved and underbanked communities.
The latest move raises Aura’s raised capital amount to $403 million through 21 bond issuances, a number that has helped to fund 283,469 loans.
Aura said there are millions of working families in the U.S. who simply don’t have access to safe lending and are susceptible to predatory lenders. Aura, along with Varadero Capital, provides borrowers with loans that save hundreds of millions in fees by not being predatory, the company said.
“We have been investing with Aura for the past four years because we strongly believe in the company’s mission and credit culture,” said Fernando Guerrero, Managing Partner and Chief Investment Officer of Varadero Capital. “Not only do these bonds provide compelling returns for our investors, but they support affordable loans to hard-working people who might not otherwise be able to obtain access to capital. By seeing borrowers as more than their credit score, Aura is setting the standard for responsible small balance loan origination.”
James Gutierrez, CEO and founder of Aura, said the capital will help further the company’s mission.
“We are proud to have worked with Varadero on two-thirds of our social bond issuances since 2015,” said Gutierrez. “Our shared values reinforce our mutual investment in building a responsible credit culture rooted in a borrower’s ability to repay. This latest investment will help Aura serve more working families across America and further our mission of expanding access to capital in low-income communities.”
Aura uses a cloud-based lending technology that lets local businesses submit applications for credit for review and approval through scoring algorithms. It’s available in 1,200 locations throughout California, Texas, Illinois and Arizona.