Finitive, a private credit platform providing institutional investors with direct access to alternative lending investments, announced that it has facilitated a credit facility for a specialty finance company that buys distressed small business loans and merchant cash advance (MCA) portfolios.
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The specialty finance company will use the credit facility to purchase distressed and non-performing portfolios from non-bank MCA lenders, and also from investors and warehouse lenders to MCA lenders.
“The COVID-19 shutdowns were devastating not only to small businesses, but also to many MCA lenders who could not collect what was owed to them. Our industry sources tell us that well over half of MCA lenders have either failed or are currently in the process of liquidating,” said Caroline Hayes, co-founder and President of Finitive. “This time is ideal for a new entrant to acquire distressed portfolios at a steep discount, while at the same time delivering liquidity back into the marketplace. We are thrilled that we could match our specialty finance client with an institutional investor that sees the potential in this space.”
MCA lenders allow businesses to convert future credit card or payment account receivables into capital, providing small businesses with efficient and frictionless access to working capital. The small businesses can use this capital to purchase supplies and inventory, hire employees, advertise, manage uneven cash flow, address seasonal demand or invest in new growth opportunities.
MCA lenders seeking to sell their portfolios can visit Finitive’s platform at www.finitive.com to access a network of institutional investors who are actively allocating to small business credit opportunities.
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