Immigrant Financial Services Provider Stilt Raises $ 100 Million Debt Facility with Silicon Valley Bank – TechCrunch
Stilt, a financial services provider for immigrants to the United States, today announced that it has raised a $ 100 million warehouse with Silicon Valley Bank to loan it to its customers. This brings Stilt’s total credit facilities to date to $ 225 million and will allow it to reach over $ 350 million in annualized lending volume. The company also announced the public launch of its toll-free checking accounts, which have been in private beta since September.
AY Combinator alum, Stilt was founded five years ago by Rohit Mittal and Priyank Singh. Both faced the challenges of accessing financial services as immigrants and wanted to start a business to serve others without a social security number or credit history.
For applicants without traditional credit reports, Stilt’s loan application process takes into account their personal information, including banking transactions, education, employment, and visa status, and also uses algorithms for Proprietary machine learning that draws on demographics from a wide range of financial and non-financial data. sources.
TechCrunch last covered Stilt when it announced a $ 7.5 million funding round in May 2020. During the pandemic, demand for loans increased for a wide variety of reasons. Some clients have applied for new loans because their working hours have been reduced. The own jobs of the other borrowers were not affected, but they had to transfer money to family members in other countries who had lost income. Many have used loans to pay for additional visa processing, and many clients have turned to Stilt because other financial providers have closed or reduced their loan programs due to repayment issues.
Despite the economic challenges caused by the COVID-19 pandemic, Stilt’s loan performance has remained stable. Many Stilt customers use their loans to build up a credit history in the United States, and even borrowers who lost income due to the pandemic continued to make payments on time (Stilt also created temporary programs, in particular an interest exemption for a few months, to help those who had financial difficulties).
Mittal said immigrants are also generally more creditworthy, as many have moved to the United States to pursue education or career opportunities. The difficulty in obtaining visas means that “all immigrants move to the United States after going through many hurdles,” Mittal said. He added that “it’s not just people from other countries. We also see it in DACA candidates. They tend to be the best risk-adjusted return clients. These are people who go to school, they work, they’ve seen their family working, they help their parents, they do all of these things, and they understand the value of money, so they end up being a lot more financially. responsible.”
Stilt’s new checking accounts, powered by Evolve Bank and Trust, are also designed for immigrants, with features like cash rate remittances in around 50 countries. Users can also apply for pre-approved lines of credit and loans through their accounts. Since it opened to existing customers in September, the number of active checking accounts has increased by 50% month over month, with many using it for direct deposits of their wages.
Silicon Valley Bank’s new credit facility means Stilt will be able to provide larger loan volumes and better interest rates, Mittal said. Stilt’s average interest rate is around 12% to 14%, compared to the 30% to 100% charged by other programs, like payday loans, that people without a Social Security number or report on. credit often use.