Sunbit, a “buy now, pay later” fintech platform, closed its largest transaction to date with a $310 million warehouse debt facility from Citibank and Century City-based Ares Capital Management on Jan. 23.

This is the third warehouse financing deal that Sunbit, based in Westwood, has closed in its eight-year history. The large loan grant reflects its market dominance and recent rapid growth and expands its consumer-financing product into 23,000 car dealerships and general dentistry offices around the country. 

A warehouse debt facility, unlike typical loans or equity investments, is typically used by fintech companies as a bridge between its front-end credit offering to consumers and its back-end business scaling. Essentially, the company will use this revolving line of credit to extend more loans to a greater number customers to free up its own funds to support this payment network’s growth.

“Regardless of what markets we enter or what products we offer, every major decision will be tested against what matters most: how many customers we’re reaching, whether they come back to Sunbit, and how their experiences were,” said Arad Levertov, the chief executive of Sunbit.

The financing company was the No. 5 firm on the Business Journal’s list of Fastest Growing Private Companies last year. 

Sunbit said this new line of funds will be used meet the high demand for its Sunbit-branded credit card, which has more than 100,000 users.

Ares Capital Management’s private credit division has grown substantially as a player in the private financing market amid an unsettled economy. The last direct lending fund it closed was over two years ago, an oversubscribed $8 billion from a $4.5 billion target. 

“We are excited to be partnering with the Sunbit management team as they continue to grow their technology-driven consumer finance platform,” said Jeffrey Kramer, partner in Ares Credit Group.  “This transaction is another example of Ares’ ability to provide a scaled and flexible financing solution to help a company such as Sunbit achieve its strategic objectives.”

Ares has focused on middle-market companies like Sunbit with strong competitive holds. James Paris, Sunbit’s chief capital officer, said the company is closing in on half the market share of original equipment manufacturer car dealerships in the U.S. Its growth rate last year, adding between 500 and 700 businesses per month, sealed the deal for such a large financing deal.

“We think they are some of the most talented people on Wall Street when it comes to this type of finance, and they were at the top of our list of potential partners for a new facility,” Paris said.

While Sunbit approaches half of the car dealership market this year, Paris said the company still has a ways to go to tap in to the dentistry market, as its product is available in only 4% of practices across the country. The connection between the two businesses may not be immediately obvious, but Sunbit frames these as the “unexpected” transactions consumers may face – such as an emergency tooth repair or a part replacement after a car accident. 

Unlike other “buy now, pay later” fintech companies such as Klarna or Sezzle, Sunbit is not an e-commerce product first. Meeting consumers at an unplanned expense, Sunbit poises itself as the in-person installment-payment option to offset the large prices of car repairs and dental work.

Delayed-payment offerings at points of sale has become a substantial market amid high inflation and rapid e-commerce adoption. According to Straits Research, the global market was worth more than $256 billion in 2022 and is expected to reach nearly $4 trillion by 2031.