VIVA Finance, an Atlanta-based lending startup, has raised more than $220 million in new capital, including equity investments and loan financing, the company recently announced.
VIVA is a lending platform that offers loans based on metrics like employment information, rather than just credit history. The company was started by two brothers, Jack and Hodges Markwalter, who wanted to expand access to credit for working Americans and offer an alternative to predatory payday loans.
“We allow people with good jobs but maybe damaged credit history to get access to a good loan,” the company’s CEO, Jack Markwalter, told The Atlanta Journal-Constitution.
VIVA offers loans as small as $1,000 all the way up to $10,000. Interest rates range from the upper teens to 36%, according to Jack. Clients repay through payroll deduction.
In total, the company has originated more than $250 million in loans. VIVA started lending in February 2020 and has given out about 70,000 loans in that time, he said.
They are most commonly used for debt consolidation, then emergencies like auto repair or medical expenses, said Hodges Markwalter.
Nearly 40% of Americans would not fully cover a $400 emergency with cash or a credit card that they paid off at the next statement, according to the Federal Reserve.
“Any sort of event that causes somebody to go out of financial equilibrium is a time where … typical consumers rely on things like credit cards,” said Hodges.
“But our customers, over 80% use debit cards for payments. They don’t qualify for credit cards and so, in the event of those emergency expenses, (they) really have few financial options to turn to,” he said.
Now, the founders are hoping to expand the business and plan to use the new financing to spur that growth. They raised $15 million in equity capital to help fund operations, and a little under $210 million in debt capital to finance loans. The majority of the capital is coming from Community Investment Management, a global private credit investment manager that primarily works with financial technology startups.
VIVA has clients in 42 states, but the company is now working to expand to all 50. The founders also plan on growing their workforce. VIVA has 67 employees, but is looking to add 20 more. The company is headquartered on the Beltline, across from Krog Street Market.
“We think we can be successful at scaling to billions of dollars of originations just for this unsecured personal loan product,” said Jack. “I think that that’s a very realistic goal that we can get to hopefully in the next five-ish years.”
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