Barcelona-based working capital provider Novicap has agreed a €200 million debt facility with asset manager Fasanara Capital to expand its working capital platform for SMEs, mid-market companies and public bodies.
The additional credit is expected to ease the scaling up of Novicap's "end-to-end" working capital offering, which includes supply chain financing, invoice factoring and flexible finance for supplier payments. Novicap claims the facility will unlock over €1 billion in "financing volume" annually.
Small business financiers like Novicap sell loans to tide companies over while they wait on invoices or to pay suppliers in the meantime.
As this involves a lot of liquidity, working capital brokers typically arrange bridge loan facilities to expand and bring more businesses onto their loan book.
Novicap argues rising interest rates and inflation have diminished the appeal of traditional fixed income investments, meaning working capital financing will grow sharply as an asset class.
The startup believes its technology-led working capital products are a "reliable" alternative to traditional banking, while also making it easier for investors by allowing loans origination and underwriting to occur digitally.
Novicap was founded eight years ago. By the third quarter of this year, the transaction volume processed by its platform had surpassed €1 billion.
Fasanara Capital first partnered the startup in 2017, when it began purchasing some of its receivables.
Since then, Fasanara's involvement has progressively expanded and the asset manager is now among Novicap's "leading credit funders."
Lois Duhourcau, CEO of Novicap, commented: "Building on the relationship developed over many years, this new funding agreement is a major step in the scale up of our credit solutions.
"Fasanara Capital is a pioneer in our asset class, and counting on their support in today’s markets is an invaluable asset.
Federico Travella, executive chairman at Novicap, added: "Together with the resources we have been adding to our SaaS solutions, this places us in an ideal position to help SMEs, mid-market corporates and public administrations manage their working capital.”