Transaction continues Castlelake's strong momentum in specialty finance
Castlelake, L.P. ("Castlelake"), a global alternative investment manager with 17 years of experience investing in asset-rich opportunities, today announced an agreement with ProApprove to acquire up to $350 million of new home improvement installment contract receivables. ProApprove is a wholly-owned subsidiary of Credibly, an established technology-driven and small-medium business lending platform.
ProApprove expects to tap Credibly's sizable merchant network, which includes several hundred residential contractors. Expenditure for home improvement in owner-occupied housing stock has increased steadily since 2019 and is expected to continue rising in 20221. The new installment contracts originated by ProApprove will be informed by approximately 10 years of receivable collections data on home improvement financing customers across more than $55 million of financing.
"We are pleased to support the expansion of ProApprove's home improvement financing program at a time when there is increased demand for financing solutions from homeowners across the U.S.," said, Matt Little, Partner, Global Specialty Finance and Business Development & Capital Markets at Castlelake. "We believe that ProApprove's parent Credibly has established itself as an experienced commercial lending platform with a keen focus on risk. We believe this transaction provides an opportunity to support a new product for Credibly in a historically underserved consumer market."
"Castlelake's experience underwriting revolving credit is invaluable as we look to accelerate the ProApprove program and expand access to financing to residential contractors and homeowners," said Ryan Rosett, Co-founder and Chief Executive Officer at Credibly.
Since 2015, Castlelake has invested over $3 billion in specialty finance opportunities, including more than 3,500 commercial and industrial loans and over five million consumer receivable accounts. Recent activity includes Castlelake's investment in IMH, a specialty lender focused on helping small to medium-sized real estate investors and developers address short-term liquidity needs; a forward flow purchase agreement with Chesswood, a specialty finance company that specializes in the commercial equipment finance market; and a financing agreement with 118 118 Money, a UK-based financial services company focused on providing high-integrity products that help consumers strengthen good financial habits.
1 Joint Center for Housing Studies of Harvard University, "Leading Indicator of Remodeling Activity (LIRA)," October 2021, and "Residential Remodeling in Top Metros to Accelerate in 2022," February 24, 2022.