Fintech Small Business Lender Credibly Touts Ratings Agency Affirmation of Public Market Securitization: A COVID-Era Success Story

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Small business lender Credibly recently announced that the Kroll Bond Rating Agency (KBRA) eliminated its ‘Watch’ status for Credibly’s public market securitization and affirmed the ratings on three classes of notes issued in Credibly’s Asset Backed Securitization. This affirms Credibly’s success in navigating the economic uncertainty of the past two quarters and serves as a vote of confidence in the lender’s ability to continue providing capital to America's small businesses under the toughest of conditions. 

The rating affirmation from Kroll Bond Rating Agency (KBRA) was the result of months of portfolio management work and modifications provided by Credibly to their merchants. In the initial months of the pandemic, Credibly moved more than one-third of its staff onto its portfolio management team, working directly with thousands of small business owners to adapt the terms of their financing agreements to assist them in weathering the hardships they were experiencing due to pandemic-related shutdown orders.  

“By looking at more data than was previously required for new originations, we quickly learned how to effectively manage risk under the new normal. We continued to use our models but also had trained eyes on every file to test our hypotheses so that we could continue to lend effectively” said Credibly Founder and co-CEO Ryan Rosett. 

The company leaned heavily on its data science and technology capabilities to refine its lending process under the harrowing circumstances of the past six months. Ultimately, these changes allowed the company to meet its obligations to its primary stakeholders while continuing on its mission to provide necessary financing to our nation’s small businesses. 

When asked what the rating affirmation means for the company, Rosett said, “preserving the securitization and the credit facilities we have with our two bank partners means we can continue to lend and further invest in our growth. The regrading of our securitization Class A, B, and C notes is proof that we effectively managed our existing portfolio and at the same time made the necessary adjustments to continue funding our customers”.  

One of the material factors that KBRA considers in its rating decisions, and a factor that Rosett believes distinguished Credibly’s results from that of its competitors, was the rate of delinquencies. “If you look at our delinquencies versus that of our peers you'll see some very interesting differences,” said Rosett. Credibly, it seems, does not have many competitors who navigated the landscape as adroitly as they did.  

The Path Ahead 

Rosett believes the rating affirmation puts Credibly in a strong position relative to its cost of funds going forward. 

Not only that, but he expects the experience of working to maintain the quality of its asset-backed securities has also strengthened the company’s core underwriting, servicing, portfolio management, and origination business. Ideally, Rosett offered, these procedural changes will result in a broad expansion of the types of financing options that Credibly will be able to offer its customers in the near future. 

“Credibly is constantly striving to better serve our customers, while growing our portfolio prudently and profitably. Our multi-pronged financing strategy reduces our cost of capital and allows us to be extremely competitive as we grow our business” Rosett said. “We're extremely pleased with where we are today on our mission of assisting SMBs who are seeking working capital. Our originations are back to pre-pandemic levels and we feel very well positioned for the future.”

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.