June mortgage mergers aim to fill industry gaps

Credibly, a fintech lender for small and medium-sized businesses, purchased ProApprove, which offers home improvement financing to homeowners with prime, near-prime and non-prime credit.

ProApprove sources business through installment contracts with home improvement contractors. These loans compete with other forms of financing, which include among real estate secured products like cash-out mortgage refinancing, home equity loans and lines of credit and reverse mortgages for those who are eligible; credit cards are another source to fund home improvements.

“Through conversations with contractors who obtain financing from Credibly, we identified a significant market opportunity in the home improvement space,” Ryan Rosett, co-founder and co-CEO of Credibly, said in a press release. “Contractors who offer financing solutions through ProApprove will no longer need to turn down sales due to a homeowner’s inability to pay for a project upfront, helping those contractors grow their book of business.”

Concurrently, Credibly and ProApprove reached an agreement to sell up to $350 million in newly originated home improvement receivables to Castlelake, an alternative investment manager.

“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.,” Matt Little, partner, Global Specialty Finance and Business Development & Capital Markets at Castlelake, said in that company’s press release. “We believe this transaction provides an opportunity to support a new product for Credibly in a historically underserved consumer market.”