Sunbit, a point-of-sale lender that focuses on critical emergency services like auto repairs and dental work, has raised $26 million in Series B funding, the company confirmed today. Sunbit will use the funding to add new retailers, with an emphasis on adding more medical offices.

CEO Arad Levertov told Bank Innovation that Sunbit is adding hundreds of new retailers per month in fields such as dentistry, optometry, auto repair and veterinary care. The Los Angeles-based company already has partnerships with more than 1,500 merchants, including certain Mazda, Nissan and Toyota dealerships.

“Many services, especially non-discretionary services, happen in brick-and-mortar [retail],”Levertov said. “We focus on those things that you have to do.”  

The latest fundraising round was led by Zeev Ventures, Group 11 and Chicago Ventures. Since the company’s founding in 2016, it has raised $54 million.

Sunbit provides merchants with a tablet to process the loan applications. Merchants then scan a customer’s driver’s license, while customers input their email address and phone number. Sunbit then makes a loan decision in less than 30 seconds.

Sunbit provides loans of up to $5,000 that can be split into three, six or 12 payments. The company said it approves 90% of applicants. Unlike many other point-of-sale lenders, Sunbit charges interest on its loans. For customers with good credit, Levertov said the interest rate would be in the low teens. For subprime customers, the highest interest rate is 35.99%.

Levertov said its customers typically don’t have access to a credit cards and the rates Sunbit provides are better than payday loans. Sunbit also charges fees to merchants to use the service and, although the amount depends on the customer, he noted that the amount is usually below 10% of the purchase value. Sunbit’s revenue is split about 50/50 between customer interest and merchant fees.

Sunbit is competing in an increasingly crowded field of startups going after point-of-sale loans, including Affirm, Klarna, Bread and Afterpay. Levertov said Sunbit’s niche is critical expenses in physical stores while other point-of-sale lenders focus on discretionary purchases.

Via email, Sean Stein Smith, an assistant professor at the Lehman College Department of Economics and Business, stated that Sunbit provides an option for customers between paychecks or for those on a tight budget. “We are going to have to wait and see whether or not they are able to convert a one-time customer to a repeat/returning client,” he added.