Key facts
- Figure closed a $300 million fully prefunded securitization for loans on its Figure Connect marketplace.
- The securitization model secures funding from institutional investors before loans are originated.
- CEO Michael Tannenbaum stated this provides originators with committed liquidity and reduces uncertainty.
- The company aims to establish this as a repeatable funding model for loans traded on Figure Connect.
- Figure Connect originated $1.4 billion in loans in May.
Figure announced Tuesday the closure of a $300 million fully prefunded securitization for loans intended for its blockchain-based marketplace, Figure Connect. This transaction deviates from traditional securitization by securing funding from institutional investors prior to loan origination, rather than after.
According to Figure CEO Michael Tannenbaum, this approach offers originator partners guaranteed liquidity in advance, helping to stabilize pricing and reduce uncertainty in their loan pipelines. Tannenbaum described the model as providing "added certainty" for originators, allowing them to know loans are spoken for before funding.
The company aims for this upfront fixed-rate capital to become a repeatable funding model for loans traded via Figure Connect, drawing parallels to the liquidity provided by Fannie Mae and the agency mortgage-backed securities TBA market. Tannenbaum highlighted investor comfort with Figure's "shelf"—its brand, technology, and capital markets track record—as a reason for their willingness to prefund.
This $300 million deal marks Figure's first prefunded securitization and is part of a broader strategy to ensure consistent capital market access for its partners. Tannenbaum noted that Figure Connect originated $1.4 billion in May, with this securitization representing a significant portion of that volume. The company also recently announced its intent to acquire Kiavi for $717 million.