The $4.2 billion-asset First Internet said in a press release Wednesday that it plans to purchase $100 million of ApplePie-originated loans by the end of this year.
“As a lifelong entrepreneur, I know the value of working with a bank that understands the challenges and rewards business owners face,” David Becker, First Internet’s chairman and CEO, said in the release.
First Internet “is committed to providing small business owners access to holistic financial services and thoughtfully designed digital experiences,” Becker added. “We are excited to join forces with ApplePie to help provide franchisees with the unique financing solutions they need to succeed.”
ApplePie sources and originates loans to franchisees in all 50 states. The loans are used for new franchise locations, acquisitions, remodels, refinances, equipment and recapitalizing existing businesses. The company has provided nearly $1.3 billion in funding since 2015.
“This announcement is not a surprise as [First Internet] has talked about securing new loan sources for some time now,” John Rodis, an analyst at Janney Montgomery Scott, wrote in a note to clients.
The ApplePie arrangement “helps to offset the expected decline in health care loans as that partner is being acquired by another bank,” Rodis added.
First Internet bought an equity stake in Lendeavor in 2017 that included a five-year commitment from the bank to buy up to $120 million of loans to health care practices each year.
Lendeavor, which rebranded as Provide in 2020, was recently sold to Fifth Third Bancorp in Cincinnati.