Snap Finance, a nonbank lender with a digitized approach to financing consumer purchases at checkout, has secured a $100 million revolving credit facility from a syndicate led by BMO Harris Bank.
The Salt Lake City firm, which provides point-of-sale financing to consumers, said the credit facility will enable it to service more than $1 billion in lease-to-own finance agreements, add new merchant partners and increase financing capacity.
The move is the latest example of industry interest in services that cater to subprime consumers; PayPal, for example, in June made an investment in LendUp, a tech-focused consumer lender that focuses on subprime borrowers.
Snap describes itself as a fintech company because it allows consumers to digitally apply for financing and receive an answer on the spot.
The firm currently partners with 10,000 merchants (mostly local small businesses, such as tire shops) and said it approves up to 80% or more of customers who typically are denied credit through traditional financing methods.
“The financing provided by BMO Harris Bank strengthens our business model and our already-solid financial footing,” said Matt Hawkins, founder and CEO of Snap Finance, in a press release issued Tuesday. “And more importantly, this will allow us to help even more businesses grow as we approve more customers for financing.”
Aside from lead bank BMO Harris (a Chicago unit of Bank of Montreal), the syndicate providing the $100 million credit facility consists of First Tennessee Bank and BankUnited.