Consumer finance company MoneyMe has established a new warehouse funding facility, which it says will reduce its funding costs by more than half.

The company announced yesterday that Westpac is providing the senior funding and the AOFM is providing additional mezzanine funding through the Structured Finance Support Fund.

The facility has an initial A$167 million loan receivable funding capacity, with the amount “to be increased significantly over time in line with loan asset growth”.

According to the company’s November 2019 prospectus, it has funding from two warehouses already. With the new facility in place it will refinance $60 million of existing receivables.

The company said the funding cost of the new warehouse was around 395 basis points over the bank bill swap rate. On a fully drawn basis, taking its combined warehouse funding into account, the company’s loan asset funding cost is around 500 bps over BBSW.

Its average funding costs in 2019/20 was 11.4 per cent. It said its funding costs will come down further when it refinances one of its earlier warehouses later this year.

MoneyMe chief executive Clayton Howes said in a statement that the company would be introducing more competitive pricing.

According to its prospectus, the company uses risk-based pricing for its core product, an unsecured personal loan, with interest rates ranging from 8.99 per cent to 29.99 per cent.

Its Freestyle Virtual Credit Account offers a line of credit up to $10,000, with rates ranging from 16.99 per cent to 25.99 per cent.

In the year to June, it originated $178.5 million of loans and closed the year with a loan book value of $133.6 million.

MoneyMe also announced the addition of a “person to person” payment feature, PayAnyone, for the Freestyle account. It allows customers to pay any bank account in Australia.