Cross River Bank extended a $150 million credit facility to personal lending fintech Best Egg to strengthen its Flexible Rent product, the bank announced Tuesday.
Best Egg’s Flexible Rent product is a loan that integrates with property management systems to give renters point-of-payment flexibility, at no cost to property managers. The product allows renters to break up their rent into smaller chunks aligned with their cashflow, which according to Best Egg “ensures on-time payments and reduces bad debt.”
The credit facility bolsters an existing relationship between the two entities that began in 2013, when Best Egg was known as Marlette Funding, with Cross River originating the fintech’s core loan products.
David Sullivan, managing director of Best Egg Flexible Rent product, said that the product now has the capacity to serve more than 10 million homes – or 20% of the rental housing market.
“At Best Egg, we aim to provide flexible solutions to our customers, especially those with limited savings, and help them navigate their everyday financial lives,” Sullivan said. “The expansion of our credit facility with Cross River, a partner that genuinely identifies with our business goals, will allow Best Egg to provide millions of renters nationwide with more flexibility in their finances and help them to be money confident.”
Sullivan told Banking Dive that he is often reminded of the “true value” of the Flexible Rent product through customer feedback that it’s helped them “feel powerful and secure.”
“Flexible Rent is unique in that it allows renters to avoid taking a significant financial hit on the first of the month, aids them in feeling more confident with their financial position, and builds their credit, all while ensuring landlords can collect rent on time,” he said. “This extended credit facility with Cross River will allow Best Egg to provide Flexible Rent to more users than ever and empower renters nationwide to be money confident.”
Cross River has long made a name for itself as a fintech-friendly bank.
The $9 billion-asset bank is one of the largest banking-as-a-service providers, providing the underlying banking services for a large portfolio of payments, fintech and crypto firms, including lending platform Upstart and neobank Upgrade.
One of its former executives, Phil Goldfeder, is even now president of the American Fintech Council.
The $150 million credit facility extended to Best Egg is in line with previous credit facilities extended to its fintech partners, according to Tuesday’s announcement.
“This past year (2023) was a tremendous year for our direct lending team adding positions across [asset-backed securities] Sectors,” a Cross River spokesperson told Banking Dive. “Cross River’s ability to also provide a credit facility to support the program through well-protected investment structures, supports our partner’s needs at a time when others are pulling back.”