Goldman Sachs Backed FinTech Lender Capify to Resume Issuing New Loans, After Raising $ 14 Million in Equity
David Goldin, CEO and founder of Capify, a small business lender backed by Goldman Sachs (NYSE: GS), believes demand for new loans will rise again after the Australian government announced changes to lending laws and requirements. Capify has confirmed that it will start issuing more loans after securing $ 14 million in equity.
The Fintech platform had successfully secured a $ 135 million credit facility from Goldman Sachs in 2019. Capify has provided loans to Australia-based SMEs for the past decade. However, the company had stopped providing new loans when the COVID-19 crisis began in March 2020.
As reported by the Sydney Morning Herald, Goldin has revealed that the pandemic has been the most difficult time he has faced as a business owner.
“We now have a lot of firepower to weather the storm, but also the opportunity right now. There are many government-backed loan programs to help SMEs, but there are plenty of articles that big banks are simply not deploying the right amount of capital. So we think we will have some success rolling it out to Australian SMEs that could not get approved for government money or looking for a different solution.
Capify’s average transactions are valued between AUD 30,000 and AUD 40,000. Goldin has confirmed that the Fintech lender is on track to issue around A $ 100 million in loans ahead of the coronavirus outbreak.
Goldin believes demand for new loans is expected to rise again in the coming months as companies start spending Australian government funds or prepare to expand operations again once restrictions are relaxed.
“I think they initially borrowed to stay afloat. And I think the next phase of that will be borrowing so you can grow. “
Capify management has indicated that it will use the acquired capital to improve the company’s sales and marketing strategy in Australia and the UK. The Fintech firm will also invest in new technologies in order to offer more streamlined services to its clients.
Goldin believes the government’s plan to change lending laws, announced last week, is expected to increase demand for new loans.
He further noted that the more options available and the more SME owners could access finance, the better for the fintech lending industry as well.
He also mentioned:
“During this pandemic, it’s one thing that supply is capital, but you also need demand from the owner of the SME, and it’s also going to take time for confidence to grow… I think it there will be [also] consolidation opportunities out of COVID for those who are well capitalized to examine these opportunities. “