Lending fintech Salad Money secures £40mn debt facility #

Salad Money has raised £40 million in a new credit facility to help Britons avoid high-interest payday loans.

Salad Money has gotten a £40 million credit line from a US-based lending fund. They did this by using open banking to get low-cost loans for their customers.

Salad Money is an online lender that provides small loans to civil servants in the UK. The company uses open banking and machine learning to determine a borrower’s repayment potential, eliminating the need for applicants to have a perfect credit history. About a quarter of the firm’s clients have a CCJ (a civil judgement meaning that a consumer owes money to another person or business) against them, but they nevertheless pay their debts on time, according to the company itself. However, half of its customers have annual incomes between £12,000 and £24,000, which is well below the median income for all Americans.

Philip Hyatt, Salad Money’s chief financial officer, says that this new credit facility brings our total senior debt financing to £50 million and gives us the money to help more NHS and public sector workers avoid expensive borrowing.

“This important agreement for the UK’s community development finance industry is great news for NHS and public sector workers who need and can afford to repay their loans but don’t have enough fair choices,” says Theodora Hajimichael, CEO of the advocacy organisation Responsible Finance. “They have no other way to access credit other than through CDFIs like Salad, which puts them at risk of dealing with lenders who don’t care about their well-being.”

Many public sector workers in the UK are already planning strikes over pay and conditions, so this announcement comes at a very good time. The Royal College of Nursing (RCN) reports that the average income of NHS nurses has fallen by 10% in real terms over the past decade. To help its members cope with the rising cost of living, the RCN is demanding a 5% pay rise in line with inflation.