The facility expands SME access to funding while enabling efficient capital recycling for the originator.
Aluna Partners Group has successfully structured a unitranche senior facility of up to $10 million for a South Africa‑focused fintech, leveraging a receivables financing model designed to enhance access to capital for small and medium‑sized enterprises (SMEs) while supporting efficient capital recycling for the originator.
The facility is structured as a true sale of loan receivables into a UK‑based orphan special purpose vehicle (SPV) via a Sale and Cession Agreement, with the deferred purchase price (DPP) retained by the South African originator, who also serves as the initial servicer in country. Servicing fees are calculated on net collections, aligning incentives between the parties.
Each tranche carries a nine‑month tenor with a six‑month interest‑only period, and weekly waterfall distributions allow the originator to efficiently redeploy capital, while monthly payment dates provide predictability for our investors.
The transaction includes a range of credit enhancements to support investor confidence and structural strength, including a cash reserve, overcollateralization, and pledges over collection accounts held outside the SPV. Daily cash sweeps and robust structural protections enhance risk mitigation.
Each tranche carries a nine‑month tenor with a six‑month interest‑only period, and weekly waterfall distributions allow the originator to efficiently redeploy capital, while monthly payment dates provide predictability for our investors.
The transaction includes a range of credit enhancements to support investor confidence and structural strength, including a cash reserve, overcollateralization, and pledges over collection accounts held outside the SPV. Daily cash sweeps and robust structural protections enhance risk mitigation
Aluna Partners Group worked with a consortium of expert partners, including Ocorian UK as security trustee, cash manager, and corporate services provider for the UK orphan SPV; Ebury Partners UK for foreign exchange hedging; Lloyds Bank as the account bank; Investec South Africa for collection accounts; and Baker McKenzie as legal counsel.
Market Context and Growth Opportunity
The broader SME financing market in South Africa is undergoing notable transformation. Historically, SMEs have faced significant funding constraints, with traditional banks extending relatively low levels of credit and an estimated multi‑billion dollar funding gap in the sector. Innovative fintech and alternative financing models are increasingly vital in bridging this gap by offering streamlined, data‑driven access to growth capital and tailored lending solutions.
Macroeconomically, South Africa’s GDP is projected to grow modestly over the medium term, with estimates around 1.1% in 2025, rising to 1.3% in 2026 and 1.5% in 2027 as structural reforms and easing policy support investment and consumption.
In 2024–25, the South African Reserve Bank (SARB) and government have taken steps to stabilize inflation and provide space for accommodative monetary policy, reflecting an evolving macro frame that aims to support private sector activity. Efforts to improve financial sector credibility, including progress toward removal from the FATF “grey list”, are anticipated to enhance investor sentiment and cross‑border capital flows.
About Aluna Partners Group
Aluna Partners Group specializes in asset-backed finance, trade finance, investment management and advisory solutions for non-bank lenders and SMEs.
