- 1Lightspeed Capital holds over $100M in MCAs on its balance sheet.
- 2Its revenue grew 34% year over year, per the latest earnings report.
- 3The CFO says default rates are in the very low single digits and the company is moving carefully.
Lightspeed Capital, the merchant cash advance division of POS company Lightspeed Commerce, has more than $100 million in MCAs on its balance sheet, according to the company's latest quarterly earnings report. The report also showed Lightspeed Capital's revenue growing 34% year over year.
A deliberate pace
The balance-sheet-driven model has made the company relatively conservative on originations growth. In the preceding quarter, CFO Asha Bakshani said there is plenty of opportunity and that Lightspeed could move faster if it chose.
Bakshani pointed to peers, saying they lend about 1% of their gross transaction volume in merchant cash advances, and Lightspeed is well below that. One percent of Lightspeed's GTV would be almost $1 billion in MCAs. In this macro environment, she said, the company wants to move carefully on a product like Capital.
She added that default rates are in the very low single digits and that Lightspeed wants to keep them there.
Takeaway
Lightspeed is growing its capital product while keeping it small relative to the volume running through its platform. That gives it room to scale if conditions change, but for now it is prioritizing credit quality over speed.
Source reporting: deBanked.
