Watching the latest Phil livestream and he played an interview from some guy talking trash about Sezzle and provided
INCORRECT information regarding funding. He said the merchants provide most of the funding, about $75M, the rest is
$25M from its main financiers. That's why it raised
$30M from Discover.
I was reading an article about the merchant funding last week and have completely different numbers. This bloke on the vid talking trash is missing a zero on his $25M funding from financiers.
Phil (and his fans that send him info) read the forums so send him the following article to make a follow up video....
How Sezzle Funds Its Lending Programs
Like most nonbank lenders, Sezzle does not have the ability to raise deposits.
The largest source of regular funding comes from a $250 million receivables facility with Goldman Sachs Bank USA and Bastion Funding IV LLC. This is more than double the credit line Sezzle initially had. In mid-2021, Sezzle issued shares to facilitate a $30 million investment from Discover, with which it is partnering for certain services.
Reverse Funding
An interesting facet of Sezzle’s funding mix for its buy now, pay later lending is that merchants themselves have the option of ‘lending’ to Sezzle.
Here’s how this works. Merchants receive proceeds of sales through Sezzle financing up front.
“Our merchants can actually choose not to withdraw funds from their holding accounts,” says Paradis. “If they choose not to withdraw, we will pay them a yield on that balance. So our merchants are essentially lending us money.
”Merchants don’t commit to any term. They can withdraw deferred payments on demand, up to a point, and beyond that level can get their funds within seven days. While the funds are on loan to Sezzle merchants earn interest based on LIBOR.
This feature has been part of Sezzle’s arrangement with merchants since it entered the BNPL business, according to Paradis. In mid-year 2021 these deferred payments, available for funding, came to $79 million — nearly a third of the size of the receivables facility.
thefinancialbrand.com/121806/sezzle-fintech-banking-buy-now-pay-later-consumer-credit-ecommerce-omnichannel/
