US: Atlanta-based platform Nectar, which provides alternative cash flow financing to real estate entrepreneurs, has secured a $25 million senior secured credit facility with an accordion up to $50 million from investment management firm Coromandel Capital.
Nectar says that it will use the incoming capital to provide short-term rental operators with advances on their future revenues to finance renovations, remodels and down payments to purchase additional properties.
The platform enables accredited investors to own the cash flows of top-performing short-term rental operators so that they can secure fast and flexible funding without the restrictions of taking on additional debt or being diluted by an equity investor. Nectar is able to analyse the past financial performance of operators and leverage market and economic data to create forward-looking projections and offer cash flow advances according to the informed projections.
As a result, short-term rental operators can proceed to scale their property portfolios without giving up equity, while Nectar offers a single diversified security for passive investors using multiple income streams.
Luke Powell, co-founder and managing partner at Coromandel Capital, said: “Coromandel Capital is thrilled to work with Nectar. We believe Nectar is providing a much-needed service to owners and operators in the short-term rental market.”
Derrick Barker, co-founder and CEO of Nectar, said: “Nectar is committed to building a better solution for short-term rental entrepreneurs who are ready to scale. This deal with Coromandel Capital will help us fund more of those entrepreneurs in our pipeline, and we are excited to work with a team that so fully understands our vision.”
Meanwhile, Coromandel Capital provides flexible, non-dilutive growth capital via secured loans to fintech and specialised finance companies that may be too early or do not otherwise conform to the credit boxes of traditional financial intermediaries. Its facilities total more than $300 million to a number of venture-backed companies, including Nectar, as well as non-sponsored companies.
In January, Nectar raised $500,000 in pre-seed funding from RareBreed Ventures and an undisclosed amount in seed funding from Asymmetry Ventures and J4. Ventures.