The funding problem
A lender pays out the full amount of a loan on day one and gets it back over months or years. To grow, it needs money to lend that it does not yet have. A fintech that relies only on its shareholders' money would run out of it quickly, so most raise debt that is repaid from the loans they make.
The main sources
- Equity. Shareholders' money. It funds the business and the riskiest part of the loan book, the first loss.
- Deposits. Only for lenders with a banking licence. Some European fintech lenders have one; most do not.
- Warehouse and credit facilities. Credit lines from banks and funds secured on a pool of loans held in a separate company.
- Forward flow. Investors commit to buy loans as they are made, so the lender does not hold them.
- Securitisation. Pools of loans refinanced through notes sold to investors, privately or publicly, sometimes with the STS label.
- Corporate debt. Loans to the company itself, such as a revolving credit facility or venture debt, used for working capital rather than for individual loans.
Together, the asset-backed tools are often called asset-based finance, the market this site tracks.
How they fit together
A common pattern, though far from universal, is: equity and a small credit line at the start, then a warehouse facility, then securitisations that refinance the warehouse once the lender has a track record. Forward flow can appear at any stage, for example to grow a new product without holding the loans. The comparison table sets the three main tools side by side, and the structure guide explains tranches, advance rates and triggers.
What the public record shows
The tracker holds 124 announced deals. By type:
- Public securitisation: 39
- Credit facility: 39
- Forward flow: 16
- Private securitisation: 12
- Revolving credit facility: 8
- Warehouse: 6
- Asset-backed facility: 3
- Term loan: 1
12 of the 70 borrowers in the tracker have announced more than one type of deal. This only reflects what was announced: many facilities are never made public. Early signs of unannounced facilities, such as new funding companies and registered charges, are on the signals page.
All guides
- What is a warehouse facility in fintech lending?: The credit line most lenders use to fund new loans before they are refinanced.
- How is a warehouse facility structured?: Tranches, advance rate, borrowing base, concentration limits and triggers.
- What is a forward flow agreement?: An investor agrees to buy new loans as they are made, so they leave the lender's balance sheet.
- What is securitisation, and how do fintech lenders use it?: Public and private deals, and the step from warehouse to term ABS.
- What is an STS securitisation?: The EU and UK label, the ESMA and FCA lists, and third-party verifiers.
- What is asset-based finance (ABF)?: What asset-based finance means, and the part of it this site tracks.
- Credit facility vs forward flow vs securitisation: what is the difference?: A side-by-side table: who holds the loans, balance-sheet effect, typical stage.