High interest rates have left Aussies in a lurch, postponing their grand purchases and consolidating their debts. A downside of debt consolidation is that you could end up paying a greater interest rate. That’s why people are counting on non-traditional banks, like neo-lender Wisr (ASX: WZR), which provides interest rates based on an individual’s credit score. In a win for its business model, the FinTech company has gotten an unnamed Big 4 bank on board and separately secured a $25 million debt facility to enhance the capabilities of its lending platform.

Wisr has executed an agreement for an institutionally-backed debt facility to support the Company’s growth. Initially, it will draw $20 million, and then a further $5 million is available, depending on whether it achieves certain milestones. The facility will be drawn at the head company level, and the maturity date is July 1, 2025. Wisr will use part of the proceeds to repay its existing $6.5 million debt facility, which matures in May 2023.

Additionally, the Company has gotten credit approval from another Big 4 bank, besides NAB, for a new Warehouse Facility, supporting both personal and secured vehicle loan growth. This will diversify Wisr’s funding sources and capacity, boosting its balance sheet. The Company is on track to meet its guidance to the market of an additional warehouse facility becoming operational in FY23.

Wisr Chief Financial Officer, Mr Andrew Goodwin, shared, “Given the current market conditions, diversification of scalable funding sources and balance sheet robustness is prudent. These provide Wisr with the flexibility required to deliver profitability in the short term and support our medium-term growth ambitions. Receiving institutional debt funding and credit approval from another Big 4 bank is a testament to the Wisr lending platform, our technology and processes and the continued strong performance of our prime loan book.”

Since March 2018, Wisr has provided financial wellness services to Aussie consumers. It gives personalised loans with interest rates based on one’s credit score. From its business plan, it appears that the Company has a people-first model, which encourages users looking to save a few bucks where they can.

Plus, it helps that the Company is big among the Big 4, with National Australia Bank (NAB) backing Wisr’s $225 million secured vehicle warehouse (WH2) launched in October 2021. In March 2022, WH2 funding increased from $225 million to $300 million and $400 million in July 2022.

No doubt, the Company needs all the support it can get as more and more people look for lending solutions. In FY22, Wisr saw $611 million worth of new loan registrations, up 67% on FY21. Yet, the Company suffered a minor credit loss.

In Q1FY23, it took a more prudent approach, accounting for the economic conditions. Wisr made material reductions in operating costs, lifted yield through product price increases to customers and moderated growth plans to set a path to profitability within 12 months.

Its quarterly revenue is up to $21.2 million, representing a 75% increase on Q1FY22 and a 20% increase on Q4FY22. In the same quarter, it saw loan originations of $186M, a 41% increase on Q1FY22.

The Big 4 collab is a win-win for both involved. It gives Wisr access to enough funding to enable lower interest rates for its users. At the same time, it lets the Big 4 have a foot in the revenue door at all times when bank customers seek Wisr for interest rate relief without undercutting their own customers.