Novo Gets A $125M Facility From Victory Park Capital To Fund Small Businesses

Novo has obtained a $125 million facility to fund a working capital product. The digital-savvy banking service provider will use this facility to meet the needs of small businesses across the US.

Novo gets a $125M facility for a working capital product

Victory Park Capital has granted the $125 million facility to support Novo Funding. This funding will allow small businesses to access up to $75,000 worth of working capital on their Novo account.

The application for this funding is quick, as it takes less than ten minutes. Additionally, the review is complete within 24 hours. Firms with successful applications can use the funding to meet their needs. These firms will also only pay for the funds they access.

Novo has set the standard repayment period to six months for each draw. According to Novo’s CEO, Michael Rangel, this funding would solve issues many small businesses face when accessing capital. According to Rangel, small businesses sought additional funding to cater to recurrent needs, but accessing this funding was difficult.

“When a small business owner wants to invest in their business growth or simply needs additional funding to cover an upcoming payroll cycle, they have incredibly limited options for accessing capital,” Rangel said.

The CEO also said that some small businesses relied on credit cards with high interest rates. Other businesses also turned towards traditional lenders who took weeks or months to process loan applications. As such, these businesses did not have access to capital whenever needed.

However, Novo Funding was stepping in to solve these issues. The funding offered through the initiative will support the owners of small businesses to meet their short-term capital needs. The funding will also play a vital role in meeting long-term needs by promoting an easy and seamless working capital experience.

Novo survey shows small businesses have limited options

This funding comes after a survey on the platform concluded that small businesses have limited options when it comes to funding. The company surveyed 547 small business owners, 59% saying they had applied for a loan to fund their business. However, 45% of those loan requests failed to materialize.

These small businesses are applying for loans below $50,000. Only 20% of the businesses said they wanted loans of below $10,000. The small businesses that participated in the survey also noted that the requested funding was to grow their physical presence, customer base, and production capacity.

Small businesses were also concerned about debt and other financial obligations, with 47% of the respondents saying that if they applied for a loan, they would use it to pay off debts. 19% of the respondents also said they would use loans to meet payroll.

Following the survey results, Novo has launched Novo Funding to make it easier for small businesses to meet their obligations. The initiative comes after Novo released a small business debit card with a wide range of offerings.