Venture capitalists have placed their confidence in yet another alternative lender. Reports emerged Tuesday (Dec. 15) that Bizfi secured $65 million from investors at Metropolitan Equity Partners.
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According to the announcement, Bizfi will use the cash to expand its existing offerings to provide working capital to small businesses. The company said it would also use the backing to speed up the process by which SMEs can access direct funding from Bizfi and to launch a new marketing effort.
Bizfi, which provides an online small business lending platform for investors, has already facilitated loans worth $1.3 billion to SMEs since 2005, the company said. Earlier this year the company’s aggregation platform went live. The tool collects information about a potential borrower from an array of sources to assess creditworthiness.
The platform also works with other alt-lending firms, including OnDeck and Funding Circle, in order to link SMEs to investors, though Bizfi also participates as a direct lender on its own platform, the company said.
In a statement, Metropolitan Managing Partner Paul Lisiak said that Bizfi is building “the future of small business lending.”
“Their aggregation and direct lending marketplace is disrupting the fast-growing FinTech industry,” he said. “Our new investment is the result of the impressive performance we have directly experienced as a lender and participant in the company’s financing products over the past three years.”
Its founder is Stephen Sheinbaum, who also founded another alt-lending platform, Merchant Cash and Capital.
Sheinbaum recently spoke with PYMNTS to discuss what the small business online lending space will experience in the coming year.
“We will see a rise in regulatory pressure pushing toward more transparency and accountability,” he stated. “We’ll see more products with weekly pays than daily remittances. The average term for loans will be longer, extended by six months. Companies will want to be versatile platforms, almost like a one-stop shop. Technology will embolden the ease of use with regards to financial products.”