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Sezzle triples credit line to fund merchants offering ‘buy now, pay later’ services
  • U.S. Fintech darling Sezzle (SZL) has received a US$100 million loan facility to support its growth in the flexipayments industry
  • The new line of credit more than triples Sezzle's previous funding facility, a US$30 million (A$44 million) loan provided by Bastion Consumer Funding
  • Sezzle expects the new facility will go a long way in expanding the company's existing debt-finance relationship with its merchants
  • The capital will help Sezzle repay merchants offering a 'buy now, pay later' scheme to consumers via their interest-free Sezzle platform
  • Sezzle is up an even five per cent, with shares selling for A$2.52 each come market close

U.S. Fintech darling Sezzle has received a US$100 million (A$147 million) loan facility to support its growth in the flexipayments industry.

The new line of credit more than triples Sezzle's previous funding facility, a US$30 million (A$44 million) loan provided by Bastion Consumer Funding.

Sezzle expects the new facility will go a long way in expanding the company's existing debt-finance relationship with its merchants.

The capital will help Sezzle repay merchants offering a 'buy now, pay later' scheme to consumers via their interest-free Sezzle platform.

It means vendors trading on the Fintech website don't go out of pocket when their clients opt to pay for their products in four instalments using interest-free credit lines from Sezzle.

The US$100 million in funding will be put up by a newly formed capital syndicate, comprising three lenders; Atalaya Capital Management, Bastion Consumer Lending and Hudson Cove Capital Management.

The line of credit is fixed over a two year period, where Sezzle is expected to draw down at least US$20 million (A$29 million) in the first year and US$40 million (A$59 million) in the second.

Over the 12 month period ending September 2019, Sezzle made payments of US$157.5 million (A$232 million) to fund vendors offering payment plans using the Sezzle software.

Sezzle Executive Chairman and CEO Charlie Youakim said the company was extremely pleased to have secured the new and much larger loan facility.

“It not only extends our existing relationship with Bastion Consumer Funding but also introduces Atalaya Capital Management and Hudson Cove Capital Management as new partners in the Company’s growth and thereby diversifying the debt funding relationships of the Company," Charlie commented.

"This substantial increase in liquidity provided by our partners will underpin Sezzle’s capacity to grow its offering to consumers and thereby aggressively
grow our Underlying Merchant Sales," he finished.

The Afterpay of the U.S., Sezzle offers flexible repayment plans to consumers who buy from over 7500 merchants.

It allows customers to jump on the 'buy now, pay later' bandwagon, paying off their purchases in four easy repayments.

Trading on the ASX, Sezzle is up an even five per cent, with shares selling for A$2.52 each come market close. The company is operating within a A$428.7 million market cap.


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