P2Binvestor (P2Bi), a marketplace lending platform offering crowdsourced, asset-secured lines of credit to growing companies, announced today that it has secured more than $17 million in a combination of debt and equity to fund its growth mostly for its new bank partnership program. The capital will help P2Bi expand the program further, providing SMBs with an way to quickly access capital and allowing community banks to lend to growing businesses that don’t qualify for a traditional commercial line of credit.
A majority of P2Bi’s lending portfolio is funded by its marketplace, which includes banks, private and institutional investors. However, P2Bi also participates in providing lines of credit they originate, and this new debt facility is what funds that participation. Rather than raise debt from a single fund, P2Bi was able to leverage its marketplace and create a crowdfunded debt facility with more than 20 participants providing capital. The diversity of funding lowers P2Bi’s overall risk and allows the company to both expand and participate in their bank partnership program.
“Over the course of the past few months, P2Bi has focused on building a new partnership model with community banks that is proving to be very successful,” said Krista Morgan, CEO and co-founder of P2Binvestor. “Growing businesses love the idea that we can graduate them to cheaper financing without the hassle of switching, and banks love that they can be the first lender to a growing business building a valuable, long-term relationship. This raise enables us to onboard new banks into the program.”
The bank partnership program launched in October 2017 with the participation of New Resource Bank, a part of Amalgamated Bank, a triple-bottom-line bank serving values-driven businesses and nonprofits. It offers SMBs an innovative way to quickly access capital while allowing banks to increase their addressable market and improve their conversion rates. The program has been praised and labeled by American Banker as a ‘fintech partnership template for small banks’. Through the P2Bi bank partnership program, New Resource has already closed seven loans worth more than $16 million. This unique approach is especially appealing to banks looking to extend their reach to support the underserved SMB sector.
P2Bi’s bank partnership program also provides a welcome middle ground between direct lending and traditional bank loans for SMBs. Since the loans combine private investor and bank financing, SMBs end up paying lower interest rates.
As a result of the success of its expanding portfolio of SMB clients and the original bank partnership with New Resource, P2Bi was able to continue on its momentum. This funding marks the company’s fourth round of funding primarily led by angel investors, and brings P2Bi’s total equity raise to over $13 million since 2013. It will allow P2Bi to continue to forge the connection between banks and SMBs, enabling them to expand the program to more banks.