Novo secures $125m credit facility to provide working capital to small businesses through Novo Funding
Miami-based financial platform Novo is seeking to connect small businesses with working capital through the launch of its new offering Novo Funding.
Novo Funding aims to provide working capital to small businesses
At a time when funding pools are increasingly running dry, the company claims the new platform offers a range of different benefits to small businesses seeking more cash.
These include “instant access” to up to $75,000 of working capital, full autonomy over fund deployment, the ability to only pay for the funds accessed and a “straightforward” repayment scheme of six months per draw, among other features.
Applicants must have been operational for at least six months and have at least six months of business checking account transaction history.
Speaking on the launch, Michael Rangel, Novo’s founder and CEO, says small business owners have “incredibly limited options for accessing capital”, causing many to turn to credit cards with high interest rates or the lengthy process of applying for funding with a traditional lender.
In preparation for its launch, the platform underwent a pilot trial in March of this year where “thousands” of small businesses accessed more than $35 million in funding.
Backed by Victory Park Capital
To make the platform possible, Novo has secured a $125 million facility from Chicago-headquartered investment firm Victory Park Capital (VPC).
“Small businesses represent a significant segment of the US economy, and Novo has created a user-friendly product to alleviate a frequent pain point for them,” said Jason Brown, partner at VPC.
The offering will join Novo’s existing products that also aim to alleviate cash flow barriers for small businesses. These include a small business debit card launched this year and its recently enhanced invoicing tool which aims to help small businesses receive payments faster.
