Payments FinTech SumUp Gets $1.6 Billion Private Credit Loan

British payments FinTech SumUp is reportedly looking to expand following a $1.6 billion loan.

The private credit package will allow SumUp “to refinance existing debt, as well as have firepower to take advantage of any opportunities that arise over the next six months,” SumUp Chief Financial Officer Hermione Tomic told Bloomberg News Wednesday (May 1).

According to the report, 

SumUp is looking to expand on the 4 million businesses already using its services, which include point-of-sale (POS) card readers, cash advance through a partnership with VPC in the United Kingdom and tap-to-pay on iPhone for customers in the U.K., France and the Netherlands.

SumUp has seen success from serving the micro-and-nano merchant sector, where in many cases those businesses are run by a sole proprietor. The company has been adding POS hardware and issuing to complement its core card reading business, co-founder Marc-Alexander Christ told PYMNTS in an interview last year.

“Merchants are realizing that there is much more technology out there that they can embrace to help them run their businesses,” Christ said at the time.

Late last year, SumUp raised $307 million to expand its footprint and launch new services in a funding round. The news followed a report that the company was hoping to raise $1.1 billion from private credit lenders.

The Bloomberg report — citing unnamed sources — said the company’s new loan package comes from lenders that include Goldman Sachs Asset Management, BlackRock, Apollo Global Management, Oaktree Capital Management and Vista Credit Partners.

Tech companies have discovered a useful source of capital from the private credit market, which can offer funding to businesses with limited profitability that show a high growth potential, the report said.

It’s a trend PYMNTS explored in February, as stricter loan terms left businesses turning to alternative sources of credit — like private credit — to fund their operations.

In his annual letter to shareholders in April, J.P. Morgan Chase CEO Jamie Dimon warned that “the banking system as we know it is shrinking relative to private markets and FinTech, which are growing and becoming increasingly competitive.”

These firms also “do not have the same transparency or need to abide by the extensive rules and regulations as traditional banks, even if they offer similar products — this often gives them significant advantage,” Dimon wrote.