Petal, a credit card startup pioneering “Cashflow Underwriting” as an alternative to traditional credit scoring, announced on Wednesday it has closed a new committed debt facility, totaling more than $125 million. According to Petal, the new facility includes $100 million from Silicon Valley Bank (SVB), the bank of the world’s most innovative companies and investors, and $26.6 million from Trinity Capital Inc. (Trinity Capital).
As previously reported, Petal was founded in 2016 and is on a mission to build a different kind of financial services company with a mission to make safe and affordable credit accessible to everyone. The debt financing funds will be used to enable the company to expand and support the Petal credit card program. Petal further revealed:
“To date, more than 100,000 people have been approved for the Petal 1 and Petal 2 Visa cards. Approximately 70% of those consumers had a thin credit history or no credit history at the time their cards were approved. Petal has helped many of these customers establish a credit score for the first time; people who join Petal with no previous history have an average credit score of 678 after two months.”
The Petal credit card program now includes two Visa cards:
- Petal 1: introduced in October, is designed to help consumers who already have a credit history and want to improve their credit responsibly and affordably
- Petal 2: helps people build credit by providing access to a no-fee credit card with cashback and higher limits that people can qualify for even if they’ve never used credit before. Petal 2 offers lower rates, compared to similar cards in the market
Speaking about the facility, Nate Huebscher, Petal’s Vice President of Capital Markets, added:
“We are excited to expand our relationships with both SVB and Trinity through a truly innovative capital solution that will bolster Petal’s balance sheet and enable us to pursue our ambitious goals for 2021 and beyond. The closing of the transaction, structured during the height of COVID, represents a critical milestone for Petal in our efforts to expand credit access.”
