PowerPay Secures US$300m Financing From Synovus & Nearwater
PowerPay has secured warehouse lending facilities from Synovus Bank and risk retention financing from Nearwater Capital in a partnership the company values at US$300m.
The Pennsylvania-based fintech, which provides point-of-sale financing for home improvement and medical procedures, will use the capital to expand its lending operations across a network of more than 12,000 contractors and healthcare providers.
Synovus Bank, the Georgia institution with US$62bn in assets under management, joins PowerPay's warehouse lending syndicate.
New York-based Nearwater Capital will provide risk retention financing to support the company's asset-backed securities programme.
Originations target US$5bn for 2025
PowerPay processes consumer loans through an artificial intelligence platform that underwrites applications at the point of sale.
The company expects to process close to US$5bn in originations during 2025, representing growth from its current annual run rate.
The fintech operates in the embedded finance sector, where technology companies integrate financial services into existing merchant platforms.
PowerPay's system allows contractors and medical professionals to offer financing options to customers during service delivery.
Mike Petrakis, CEO and Founder of PowerPay, says the partnerships validate the company's credit quality and operational processes.
“These new commitments are a strong validation of our company's performance, credit quality, and operational rigour,” Mike says.
PowerPay has secured three partnerships with national home improvement companies that are projected to generate an additional US$800m in annual originations. The company has not disclosed the names of these partners or the timeline for implementation.
Market expansion accelerates
The partnerships represent a significant expansion of PowerPay's market presence in the home improvement sector, where the company competes with established players including Synchrony Financial and GreenSky, which Goldman Sachs acquired in 2021 for US$2.2bn.
PowerPay's technology platform uses artificial intelligence to assess creditworthiness and approve loans in real time.
The system integrates with merchant point-of-sale systems, allowing contractors and healthcare providers to offer financing without redirecting customers to external platforms.
The company's focus on home improvement and medical procedures positions it in markets where consumers typically have limited financing options through traditional bank lending.
“The additional capital is instrumental to our growth strategy and will allow us to meet the surging demand for our point-of-sale financing solutions as we further expand our securitisation programme”
Home improvement projects often fall outside standard mortgage refinancing, while medical procedures may not qualify for conventional personal loans.
Nearwater Capital's involvement addresses regulatory requirements for securitisation issuers to retain a portion of credit risk in asset-backed securities.
Risk retention rules, implemented following the 2008 financial crisis, require securitisation sponsors to maintain at least 5% of the credit risk in transactions.
Synovus Bank's participation in the warehouse lending syndicate provides PowerPay with additional capacity to originate loans before packaging them for sale or securitisation.
Warehouse facilities are revolving credit lines that allow consumer lenders to fund loans during the period between origination and sale to institutional investors.
PowerPay operates in a consumer lending market that has experienced growth during the past five years.
Point-of-sale financing has expanded beyond traditional retail applications to include home improvement and healthcare, sectors where consumers often require financing for larger purchases.
PowerPay's platform processes applications using data points beyond traditional credit scores, allowing the company to serve consumers who may not qualify for bank lending.
The system evaluates factors including employment history, bank account activity, and payment behaviour to assess creditworthiness.
“The additional capital is instrumental to our growth strategy and will allow us to meet the surging demand for our point-of-sale financing solutions as we further expand our securitisation programme,” Mike says.