Orange Money acquires Wonga small business lender Everline
Deal to pair EzBob and Everline brands follows controversial online lender Wonga writing down £220m in unpaid loans and cutting 325 staff
Orange Money Ltd, which trades as Ezbob, has acquired small business lending product Everline from parent company Wonga.
It is claimed the deal has created the biggest online business lender in the UK, with Orange Money and Everline responsible for more than 5,000 business loans totaling in excess of £54m.
Small businesses will now be able to access loans of up to £150,000 for 18 months at rates of 1.75% to 2.25% per month rather than the £50,000 previously offered for the term of a year at rates of 26% per annum by Everline.
Orange Money claimed customers will be able to make a saving of 28-40% in loan costs based on risk-based pricing. Customers can also repay early or in full without incurring additional cost.
The purchase, however, has occurred amid the backdrop of online lender Wonga – the parent company behind Everline – cutting 325 staff and writing off £220m in unpaid loans.
In the past two years Wonga, which rose meteorically, faced an investigation by the UK’s Competition and Markets Authority over its loan approval and collection practices. Its tactics for prompting loan repayments from customers included sending written warnings from fictional legal firms.
It is hoped Everline, under the ownership of Orange Money and led by ex-Everline managing director Russell Gould as chief operating officer, will be well positioned to grow with the increased appetite from small businesses for alternative forms of finance.
Orange Money describes its lending process as “simple, frictionless and transparent” and claims to make “responsible, real-time, automated risk decisions”.
Backed by the government’s Angel Co-Fund and an approved financial intermediary for the European Investment Fund (EIF), Orange Money will market to small businesses using both the Everline and Ezbob names, while pledging to review the brands.
Gould, who launched and ran Everline from its creation in 2012, has been backed by Orange Money CEO Tomer Guriel to build on solid foundations to “create an even stronger business for the future”.
“This is an exciting acquisition for us, as it brings together two strong brands in Ezbob and Everline, both of which have disrupted traditional business lending,” added Guriel.
“Our market leading technology platform complements Everline’s well-positioned brand – the combination of the two will accelerate our growth, which has already been more than doubling year on year for each brand since launch.”