Channel has launched a $300m specialist lending strategy to support fintech platforms in need of cash to finance their loans to small and medium-sized businesses (SMEs).
As part of the initiative, which international institutional investors back, $100m will be deployed immediately to fintech lenders.
Initially, loans to small businesses will be facilitated via specialist lenders operating in developed markets.
According to the UK-based lender, with declining fintech valuations, founders are having trouble accessing capital to offer loans without significantly diluting their equity.
Channel is addressing the lack of capital via a non-dilutive and debt investment model, which enables fintechs to offer loans without giving up equity.
Channel CEO Walter Gontarek said: “Providing much-needed capital to the often-overlooked SME sector has always been a goal at Channel. Fintech lending platforms are a critical part of that – making it faster and easier for deserving SMEs to access loans.
“We have been tirelessly enhancing our own digital lending capabilities and have exciting developments coming in that space. Meanwhile, the additional, sizeable investment into our Fintech Lending Fund will see us work with a greater number of tech-powered lending platforms, firstly in Europe and North America, to see capital deployed at pace to the SME community.”
Channel chief investment officer Paul Wilson said: “The investment into our data-driven lending fund is a significant step forward for Channel – it will see us work closely with other digital platforms to facilitate loans for SMEs that are faster, simpler, and don’t dilute their business.”