Latin American financial technology firm R2 secured a $100 million credit line from San Francisco-based Community Investment Management, to boost lending in Mexico, its largest market.
(Bloomberg) — Latin American financial technology firm R2 secured a $100 million credit line from San Francisco-based Community Investment Management, to boost lending in Mexico, its largest market.
R2 provides lending infrastructure and capital to allow companies including clients like Clip and Frubana, to offer financial services under their own brands. The facility obtained is a type of loan known as warehouse debt, said co-founder Roger Larach in an interview.
“With this credit line, we aim to get to a new stage as a leader in embedded lending, reducing the financing gap for small and medium companies,” he said.
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The company, which has lent $20 million to over 6 million small-and-medium sized companies across the region, provides revenue-based loans in which the repayment happens automatically as a percentage of sales, which has helped curb delinquencies. It now has 60 employees across the region.
Community Investment Management, or CIM, describes itself as “an institutional impact investment manager that provides strategic debt capital to demonstrate and scale responsible innovation in lending for underserved communities.”
This year’s tech rout and higher interest rates have made raising financing more difficult for companies across the region. But that just underscores the demand from clients and opportunity for R2 to seize, according to Thomas Wright, the head of finance.
“Financing is more expensive across the board, and it’s meant banks and underwriters serve small merchants even less,” he said. “The appetite only keeps rising and the opportunity is so large, that we needed the capital to keep growing.”
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