Avant Loses 30% of its Staff, Including CEO’s Wife; Here’s Why You Don’t Have to Worry
Avant lost 30 percent of its staff to the voluntary severance program it offered its employees last month , and CEO Al Goldstein’s wife and chief compliance officer, Anna Fridman is said to retire at the end of the quarter.
The Chicago-based subprime lender has had a spate of troubles recently, jeopardizing investor confidence in the company. The 30 percent staff cut was originally going to be 40 percent and the company had planned to cut two thirds of their loan volume. They also pulled back on their auto refinancing plans.
But things are getting better..or are not as bad as they sound. Avant has been making progress on some fronts — it closed a $255 million asset-backed securitization led by JP Morgan and Credit Suisse as well as renewed a $392 million warehouse facility with the banks and plans to start charging fees on its loans to keep its investors from going astray.
Avant’s model, as The Wall Street Journal noted was built on selling loans at a premium to the investors and not charging fees to the borrower. And as investors retreated, Avant decided to pivot too. The lender said it plans to charge an “administration fee,” competitively priced at 1.75 percent to 3.75 percent of the loan amount. The company hopes to keep its investors roped in by making loans cheaper for them.
Will it work? There’s only one way to find out.Last modified: August 18, 2016
Srividya's work has appeared in publications like Money magazine, Advertising Age, FirstPost and The Economic Times. She has also dabbled in business intelligence solutions, and holds a Masters degree in Business and Economic Reporting from NYU.