Car leasing app Fair has secured a $500 million revolving credit facility led by Mizuho Bank.
SoftBank Group Corp. is among several credit providers also participating in the loan, which will be used to unlock new levels of growth for both Fair and its partner Uber by boosting the supply of rideshare vehicles for Uber drivers.
“Too often, people who want to drive for Uber can’t get reasonable rates on a car loan or even get access to one at all, so we’re taking care of that for them,” Scott Painter, Fair’s founder and CEO, said in a press release. “This transaction is another clear signal that, through our partnerships with SBG and Uber, Fair has the momentum, consumer demand for vehicles, and access to capital to be the supply-side solution for ridesharing globally.”
This is the third significant line of credit for Fair this summer. There was a $100 million debt facility and minority equity investment from Ally Financial in August, as well as a $50 million increase to its credit line with Silicon Valley Bank in July. Fair continues to utilize debt facilities from Credit Suisse and Goldman Sachs as it scales its consumer and rideshare businesses.
“We believe Fair is an appealing partner for institutional lenders looking to manage the consumer credit risk associated with traditional auto finance,” said Andrew Karnovsky, managing director and head of automotive banking at Mizuho Americas. “Not only do subscriptions make sense for ridesharing drivers who want to access a vehicle on their own terms, but they essentially replace a system built on auto debt with a recurring-revenue model and steady cash flow.”
Through Fair’s Uber program, drivers with a form of digital payment can access a Fair car by the week with no credit check and only a refundable security deposit. Each payment includes unlimited miles, insurance, routine maintenance and roadside assistance.
“This new line of debt capital unlocks unlimited growth potential for both companies, as they continue to transform the fundamental relationship between people and cars,” said Hiroki Kimoto, Head of Real Asset Investment Department of SBG. “We are delighted to support the powerful natural synergies between Fair and Uber.”