Novo Secures $125 Million Facility for New Working Capital Offering

Novo has launched a new offering to help small businesses access working capital.

The company has also secured a $125 million facility from Victory Park Capital (VPC) to provide working capital via the new offering, which is called Novo Funding, Novo said in a Tuesday (Aug. 1) press release.

“When a small business owner wants to invest in their business growth or simply needs additional funding to cover an upcoming payroll cycle, they have incredibly limited options for accessing capital,” Novo founder and CEO Michael Rangel said in the release.

The Novo Funding offering was well received by small business owners who participated in a pilot program, according to the release. The company announced in March that it was conducting a pilot of a working capital program and that it had already worked with 3,000 customers at that point.

Novo Executive Vice President of Credit Kevin Phillips said in the release that during the pilot, “thousands of small business owners accessed more than $35 million.”

Novo has designed the new offering’s funding process to be easy and efficient, the release said. The application can be completed in less than 10 minutes, and once approved, within 24 hours, businesses have access to up to $75,000 of working capital. Businesses also have full discretion over how to use the working capital.

Novo has also put straightforward repayment schedules in place, per the release.

Lacking IT or accounting specialists, small- to medium-sized businesses (SMBs) often rely on one person’s grit to perform administrative tasks like paying bills, Novo Executive Vice President Grant Sahag told PYMNTS in an interview posted in October.

“[Small businesses] are essentially living paycheck to paycheck,” Sahag said at the time. “The bills that these folks are trying to pay are not just vendors; they’re trying to pay their electricity bills.”

Using a predictive financial tool that provides both automated functions and personalized insights can sometimes mean the difference between life and death for these small firms, he said.

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