On Wednesday, private lending syndication platform CrowdOut Capital announced it has funded more than $112 million in loans in less than two years. The online lender reported that accredited investors choose from its vetted loan offerings on a deal-by-deal basis. Alexander Schoenbaum, CEO of CrowdOut Capital, stated:
“Our platform allows individuals and institutions to invest directly into loans of middle market companies, which represent the backbone of our economy. These one to five-year loans help take these companies to the next level. We are just beginning to hit our stride and are filling an unmet need of borrowers and investors alike. Our transactions allow companies to avoid much of the long duration and high costs of traditional credit facilities, while providing our investors an average net return of over 11 percent.”
CrowdOut explained that it funds loans as small as $3 million to companies with annual revenues between $10 – $500 million to fuel growth and its loans have reached borrowers from a variety of market sectors. The lending platform recently funded Schweizer RSG’s carve-out of Lockheed Martin’s S-300 and S-333 helicopter manufacturing operations. The lender also revealed it provided project finance to Lloyd Electric, a disabled veteran’s small business, to help rebuild the power grid in Puerto Rico after the devastation of Hurricane Maria.
CrowdOut Capital then revealed in the past six months it has set a new standard in the private lending market by dramatically increasing its velocity of loans funded. Several milestones include:
- Grew Investor Network: The company quickly surpassed 100 investors on the platform and continues to add new investors.
- Elevated Returns: Investors are currently yielding 12.1 percent net return after fees on investments made in Q1, making it the strongest quarter on record.
- Decreased Selling Time: The speed of CrowdOut’s sell-through on loans sold via its online marketplace has increased dramatically. A recent loan was fully subscribed in 25 hours.
- Warehouse Facility Acquired: Committed capital gives borrowers and lenders an additional level of comfort that loans will close timely.
The lender went on to add:
“CrowdOut has an extensive underwriting process. Its due diligence includes proprietary screening and data analytics. CrowdOut’s financial professionals conduct detailed analysis and stress testing that evolved from years of experience working for traditional lenders. The company collaborates with each borrower to develop an optimal debt structure for both sides of the transaction. This includes loan covenants that mitigate default risk and monitoring to ensure spending does not outpace cashflow.”