Sezzle doubles its credit facility to $300M, slashing borrowing costs
What's the deal? Sezzle, the Minneapolis-based buy-now-pay-later platform, has secured a new $300M receivables funding facility with Mesirow Alternative Credit. The deal doubles the company's original $150M committed facility from April 2024, which had been expanded to $225M through an accordion feature.
The new facility also comes with a $75M accordion option, potentially bringing total capacity to $375M.
Why now? Sezzle is growing fast and needs cheaper, more flexible funding to keep pace. The refinancing cuts borrowing costs sharply — the interest rate drops to SOFR plus 3.86%, down nearly 290 basis points from the prior spread of 6.75%.
The advance rate has also improved, rising to up to 92.5% of eligible receivables from 90% previously. The three-year facility gives Sezzle a longer runway to deploy capital.
"This new facility materially improves our cost of capital, expands our committed capacity, and better positions us to support the growth opportunities ahead," said Lee Brading, Sezzle's chief financial officer. He added that the improved terms reflect "the strong performance of our receivables and the disciplined approach our team has taken to credit and capital management."
What could go wrong? Buy-now-pay-later companies are sensitive to consumer credit conditions. If default rates rise — particularly in an uncertain macro environment — the favourable terms of this facility could become harder to sustain. The advance rate of 92.5% is contingent on receivable performance, meaning Sezzle must maintain credit discipline to access its full capacity.
The minimum utilisation requirement of $50M also means Sezzle is committed to deploying significant capital regardless of demand.
The signal: Sezzle's ability to nearly halve its borrowing spread in just over a year points to rapid institutional acceptance of BNPL receivables as a bankable asset class. Listed on NASDAQ and classified as a late-growth company, Sezzle is leveraging its public-market credibility and maturing loan book to secure debt pricing that edges closer to traditional consumer lenders — a dynamic that could compress margins for incumbents if more BNPL platforms follow suit.
Read more: wallstreet-online.de
