Kabbage, the global financial services company for small businesses, announced Monday (April 8) it has closed the largest asset-backed securitization (ABS) by a small business online lending platform to date for $700 million.
In a press release, Kabbage said the most senior class of the five-tranche transaction had an AA(sf) rating from Kroll Bond Rating Agency, the highest ABS rating earned by a small business online lending platform for a three-year facility. The transaction also reduces the company’s cost of funds compared to its existing ABS by more than 100 basis points.
According to Kabbage, the transaction was oversubscribed, with interest coming from new and existing institutional investors, which, the company noted, showcases confidence in the strength of Kabbage's platform.
“The new ABS and AA(sf) rating is a testament to Kabbage’s proven and real-time approach to responsibly provide credit access to small businesses,” said Kabbage CFO Scott Rosenberg in the press release. “The new transaction positions the company for continued milestone growth, as small businesses accessed more than $2 billion through Kabbage last year and more than $600 million already in the first quarter of 2019.”
Since launching, Kabbage said it has helped more than 170,000 small businesses access more than $6.5 billion in funding via an underwriting strategy that relies on technology to analyze customers’ live business data and provide funding decisions in minutes. With the securitization, Kabbage's current debt funding totals $940 million, including other existing bilateral credit facilities.
This year has been a busy one for Kabbage. In early 2019, the company announced it was powering the Pay Later program for U.S. buyers on Alibaba.com. Pay Later enables small businesses in the U.S. to get up to $150,000 of financing for orders. The company said its program improves cash flow and makes global commerce more accessible for small businesses in the U.S.