Sezzle Secures $300M Credit Facility with Lower Costs and Increased Capacity

summarizeSummary

Sezzle Inc. secured a new $300 million receivables funding facility, doubling its capacity and significantly lowering its cost of capital, which is a positive for its growth and financial health.

check_boxKey Events

• New $300M Credit Facility

  Sezzle Funding SPE II, LLC, an indirect subsidiary of Sezzle Inc., entered into an Amended and Restated Revolving Credit and Security Agreement for a $300 million facility, with an option to increase by an additional $75 million. This doubles the company's previous committed capacity.

• Reduced Cost of Capital

  The new facility features an interest rate of 3-month Term SOFR plus 3.86%, a reduction of nearly 290 basis points from the prior facility's spread of 6.75%.

• Improved Advance Rate and Terms

  The advance rate has increased to up to 92.5% of eligible receivables originations (from 90.0%), and the minimum utilization requirement has been lowered to $50 million (from $60 million).

• Restricted Payments Covenant

  An amendment to the Limited Guaranty and Indemnity Agreement permits restricted payments (dividends and share repurchases) only if Sezzle's trailing twelve months of consolidated net income is positive and the aggregate amount does not exceed $75 million plus 50% of consolidated net income after May 7, 2026 (or 100% of consolidated net losses).

auto_awesomeAnalysis

Sezzle Inc. has finalized a new $300 million receivables funding facility, which significantly expands its borrowing capacity and reduces its cost of capital. This refinancing replaces an existing facility, carrying forward the outstanding balance but with substantially improved terms. The lower interest rate and higher advance rate will enhance the company's financial flexibility and support its growth initiatives. A key covenant restricts future dividends and share repurchases, linking them to positive consolidated net income and aggregate limits, which provides clarity on capital allocation under the new agreement.