Venture capitalists have once again placed their confidence into alternative lenders. FinTech provider and alternative lending platform eProdigy revealed Tuesday (May 19) that it has secured a massive backing in the form of $100 million.
According to the company, a private equity firm has led the funding in the form of a term loan. For eProdigy, the new fund is considered a game-changer.
“This deal changes our entire playbook,” eProdigy CEO David Rubin said in a statement. “Previously, we were only able to focus on making merchant cash advances to higher risk merchants. Thanks to this new facility and our lower cost of capital, we’ll be able to target A and B credit borrowers, offer a broader range of products, and provide more competitive terms and rates.”
The company’s CFO Stephen Brown agreed, adding that the deal is evidence that eProdigy’s team and technology development have played a key role in “reinventing the alternative financing industry.”
eProdigy first launched operations with a goal of developing an innovative platform to host lenders and finance originators. The company said it will use the new backing to strengthen its loan origination efforts and build infrastructure to handle the growth it expects in the near future.
Last month, eProdigy announced plans to integrate data from QuickBooks, PayPal and Authorize.net into its loan approval process, allowing lenders that do business through the eProdigy platform to have a more efficient ability to assess risk. The partnerships were part of eProdigy’s efforts to boost its technological abilities.
“Technology can play a huge role in determining whether or not to extend credit to a given company,” Rubin said at the time. “The most innovative systems in the industry are tapping into data sources that weren’t available previously, yet provide critical insight into the creditworthiness of a given business entity.”