FinanceIt is a Canadian fintech that provides point-of-sale financing for now over 10,000 home improvement, recreational vehicle and retail businesses in Canada.

They have grown their business through asset-backed warehouse financing.

FinanceIt has announced that they have grown their asset-backed warehouse facility size by C$500m to C$2bn.

The increase is from a facility upsize from CIBC and a facility with Concentra Bank.

FinanceIt set up its asset-backed warehouse facility with CIBC in September 2023 – through which it can issue loans to customers, and those loans are in turn funded through this warehouse facility. The loans are available as collateral to CIBC and Concentra.

Through this arrangement, FinanceIt is able to issue large numbers of loans, at a very low interest rate.

Their plan is to grow this facility and then issue asset-backed bonds once they have large enough total outstanding loan balances.

The benefit of refinancing the facility with asset-backed bonds is that they access capital at a lower cost, and free up the capacity of their warehouse facilities to be able to keep issuing more loans to their customers.

This warehouse facility -> securitisation process is a proven way for fintech companies around the world to compete with large bank lenders – in terms of the number of loans they can issue and the interest rate they can offer to customers.