Lending analytics firm Orchard Platform has cut a deal with alternative small-business lender Kabbage to allow institutions to invest in the latter's relatively new line of consumer loans.
It's a small step toward a grander vision, shared by many in the field, of a major secondary market for nonmortgage personal and small business debt, powered by data and analytics that give investors granular transparency on every loan.
The personal loans, which Kabbage introduced in September, are unsecured and can run up to $35,000 with 36-to-60-month paybacks. As a platform for institutional investors to invest in loans the way individual accredited investors do on marketplace lending platforms, Orchard will provide data to its financial institution clients to facilitate purchases of loan packages.
"Investors on Orchard can now analyze data, invest in [Kabbage's consumer] loans in a data-driven way, and manage their portfolio through a unified product that provides visibility into all their marketplace investments," Orchard's co-founder and chief product officer David Snitkof said in a press release.
Kabbage, completed its first securitization in April 2014. The Guggenheim Securities led deal raised $270 million from a credit facility backed by receivables on merchant cash advances.