PrivateCap Launches to Bridge Gap Between Institutional Investors and Equipment Finance Originators

In a significant development for the equipment finance industry, PrivateCap has announced its launch, aiming to revolutionize capital sourcing for small and mid-market leases and business loans. The company's mission is to create a bridge between institutional investors and originators, potentially opening up a new asset class and diversifying funding options in a shifting capital landscape.

Founded by industry veterans Bill Phelan and Barry Ripes, PrivateCap emerges at a time when traditional funding sources are facing challenges. Banks are grappling with rising capital costs and concentration limits, while independent finance companies often rely on costly warehouse facilities or Asset-Backed Securities markets. PrivateCap's innovative approach could provide a much-needed alternative, offering a low-cost process to assess smaller transaction sizes.

The launch of PrivateCap is particularly timely as global capital markets shift from public to private sources. This transition presents both challenges and opportunities for the equipment finance sector. By tapping into private capital, PrivateCap aims to create a more diverse and robust funding ecosystem for originators.

The potential impact of PrivateCap's model extends beyond just providing new funding sources. By connecting institutional investors with the equipment finance market, the company could help create a new asset class of investments. This development could not only benefit originators by providing more funding options but also offer institutional investors new opportunities for portfolio diversification.

PrivateCap's founders bring significant expertise to the venture. Phelan, the Chairman and CEO, co-founded PayNet, which maintained the largest proprietary database of small business loans until its acquisition by Equifax. Ripes, the President, has extensive experience in financial services and has worked closely with lenders, originators, and independent financial institutions. Their combined experience and industry connections position PrivateCap to potentially reshape the equipment finance landscape.

As the equipment finance industry adapts to changing market conditions, PrivateCap's launch signals a potential shift in how funding is sourced and distributed. If successful, this model could lead to increased liquidity, more competitive financing options, and ultimately, greater growth opportunities for businesses relying on equipment leasing and financing. The industry will be watching closely to see how this new approach impacts the market in the coming months and years.