US credit builder Petal closes $125m debt facility
Credit fintech Petal has announced the closure of a new committed debt facility totalling more than $125 million.
This new facility includes $100 million from Silicon Valley Bank (SVB), and $26.6 million from Trinity Capital.
It is Petal’s first asset-backed facility with SVB and Trinity Capital. The firm says it complements its existing $300 million facility with global investment bank Jefferies.
“We are excited to expand our relationships with both SVB and Trinity through a truly innovative capital solution,” says Nate Huebscher, Petal’s vice-president of capital markets.
“The closing of the transaction, structured during the height of COVID, represents a critical milestone for Petal in our efforts to expand credit access.”
Founded in 2016, Petal has now closed more than $440 million in debt and raised more than $100 million in equity financing.
It claims to be “a new kind of credit card company” built to “help people financially succeed”.
Credit building with two cards
The fintech provides two different cards to help users build their credit scores, both backed by Visa.
Petal 1, introduced in October 2020, targets consumers who already have a credit history.
Petal 2, designed for those with no credit history, offers “a no-fee credit card with cash back” alongside manageable limits.
The firm says more than 100,000 people have been approved for the Petal 1 and Petal 2 cards. It estimates 70% of these had poor or no credit history at the time of application.
Petal claims those who have joined with no previous history accrue an average credit score of 678 after two months.
Its services are underpinned by Federal Deposit Insurance Corporation (FDIC) member WebBank, which backed the launch of the Petal 2 card in 2018.
“Petal has achieved incredible growth in just a few years since their launch,” says Kyle Brown, chief investment officer (CIO) at Trinity Capital.
“We’re thrilled to partner with the teams at Petal and SVB to provide this warehouse financing facility as the company continues to scale rapidly.”