|05/19/2022||A profitable Q1 for LendingPoint|
|04/22/2022||LendingPoint names new CMO|
|10/14/2021||LendingPoint had record growth in 1st half|
|10/12/2021||LendingPoint closed 2nd rated ABS|
|03/15/2021||LendingPoint closes $110M facility|
LendingPoint announced this week that it is partnering with the online marketplace eBay to provide funding to sellers on its platform. Titled eBay Seller Capital, the program will offer terms of up to 48 months, with no origination or early payback fees, and which will be capped at $25,000 during its pilot program.
“We’re committed to empowering entrepreneurs to make their dreams a reality, and we are continuing to partner with our sellers to provide them with the tools they need to thrive, eBay’s VP of Global Payments Alyssa Cutright said in a statement. “We’re excited to make flexible financing options available that are integrated with our new payments experience. The program with LendingPoint will enable critical funding opportunities for eBay sellers, especially during this time of economic uncertainty.”
In its early stages now, eBay Seller Capital will only be available for selected sellers, with the plan being for it to be made available to all eligible sellers in the US later this year. Beyond the program, LendingPoint has made clear in its statement that it aims to “expand their offering to provide eBay sellers with more tools to help run their businesses,” however, when asked, CEO and Co-Founder Tom Burnside did not give details of these future plans.
“I don’t want to leave the proverbial cat out of the bag yet with that,” Burnside commented in a call, “but what I will tell you is that I think when we are done eBay will be able to offer best-of-class seller financing.”
Today Inc. 5000 released is 2019 list of the fastest growing private companies in America, featuring alternative finance company LendingPoint in seventeenth place after it witnessed a three-year revenue growth of 9,265%. LendingPoint offers consumer loans of up $25,000 and provides financing to merchants, service providers, and medical institutions via its LendingPoint Merchant Solutions program.
This is the Atlanta-based business’s debut on the list and it comes after LendingPoint had a strong twelve months, with it being on track to reach $100 million per month in loan originations by the end of 2019 as well as it being the year the company turned profitable. On top of these, LendingPoint also has plans to expand its operations by hiring an additional 100 people, bringing its Atlanta HQ up to nearly 300 staff members.
In a press release, LendingPoint CEO Tom Burnside claimed that “Our platform saw more originations in 2018 than in 2015, 2016 and 2017 combined [sic], and at the same time our credit performance improved allowing us to facilitate more financing for consumers online and at the point of sale.”
Such growth is attributed by Burnside to LendingPoint’s use of technology. “We started by using data and technology to provide access to credit to underserved [sic], expanded to providing financing options at the point of sale to virtually everyone, and are now working on ways to integrate financing and payments with loyalty using blockchain to protect PII and enhance customer experience.” Such technology makes use of over 10,000 alternative data points, while also using FICO as a weighted factor of their analysis, to determine an applicant’s approval.
“We spend a lot of time cross-tabularizing the data points,” said Mark Lorimer, LendingPoint’s Chief Communications and Public Affairs Officer, when asked about the company’s approach to tech. Confronted by vast amounts of data, Lorimer noted how LendingPoint makes use of its technology to determine the value of different variables, “it really is a matter of taking the data and turning it into information.”
On the subject of LendingPoint’s placement on the Inc 5000, Lorimer told deBanked that the company was “not really surprised” by the news. According to him, his colleagues had been keeping an eye on the performance of those companies who previously placed on the list and were aware of what was required to appear on it, while his CEO has a more exuberant take on it: “It has been quite a ride for the last three years, and we’ve only scratched the surface.”
LendingPoint announced today that it has closed an increase of its mezzanine funding, a hybrid of debt and equity financing. The company’s mezzanine financing now totals more than $67.5 million. Paragon Outcomes Management LLC is the primary investor and was joined for this round by an unnamed co-investor.
“Paragon Outcomes continues to provide outstanding support for the growth of the LendingPoint platform and balance sheet,” said Tom Burnside, LendingPoint co-founder and CEO. “Their support enables us to continue to build our high performing balance sheet and fuels our march towards profitability quarter. To have companies like Paragon Outcomes want to be part of our future is a strong wind at our back.”
This is a continued expansion of an initial credit facility from Paragon Outcomes for $20 million in 2017, followed by an increase to $52.5 million in June 2018.
LendingPoint provides consumer loans of up to $25,000 and has a platform, called LendingPoint Merchant Solutions, that allows merchants to offer loans to their customs for point-of-sale purchases.
In addition to today’s announcement, LendingPoint also secured an up to $500 million senior credit facility in August 2017 and an up to $600 million senior credit facility in May 2018. Both deals were arranged by Guggenheim Securities.
Founded in 2014, LendingPoint is a privately held company headquartered in Kennesaw, GA with offices in San Diego, CA.
LendingPoint announced today that it closed an increase of its mezzanine financing, bringing the total of the facility from Paragon Outcomes Management to $52.5 million. Mezzanine financing is a hybrid of debt and equity financing. Paragon and LendingPoint initiated a relationship with its first credit facility in January 2017 for $20 million. It was then upsized seven months later, and has now been upsized for the second time to $52.5 million.
“We believe this shows a tremendous amount of confidence in the way our portfolio continues to perform,” LendingPoint Chief Marketing Officer Mark Lorimer told deBanked. “It’s a great vote of confidence.”
Among other things, the new credit facility provides an increased advance rate for more efficient equity usage. Today’s announcement comes on the heels of more than a billion dollars worth of senior credit financing that LendingPoint has closed in less than a year. The company secured an up to $500 million senior credit facility in August 2017 and an up to $600 million senior credit facility last month, both arranged by Guggenheim Securities.
“[Paragon’s] support has been critical as we grow our origination volume and balance sheet, and march towards profitability next year,” said Tom Burnside, LendingPoint co-founder and CEO. “We’re proud that LendingPoint’s performance to date means companies like Paragon Outcomes want to be part of our future.”
In March, LendingPoint debuted a point of sale lending platform for merchants that Lorimer said is going well.
“We’re continuing to build it out, add more merchants to the platform and increase the funding levels,” Lorimer said.
Founded in 2014 and based in Kennesaw, GA, LendingPoint and its Merchant Solutions platform have originated more than 70,000 loans totaling more than $500 million.
LendingPoint announced today that it has closed on a credit facility for up to $600 million, arranged by Guggenheim Securities. The direct consumer lender secured a facility in September 2017 for $500 million, bringing its recent combined credit facility to $1.1 billion, in just nine months.
LendingPoint Chief Marketing Officer Mark Lorimer told deBanked that he was thrilled about the new facility for a number of reasons.
“But what I’m most excited about is the fact that we need it,” he said.
In the first quarter of 2018, LendingPoint processed more than 850,000 applications from borrowers requesting more than $9.2 billion in loans. These numbers are up from a year ago and also up from the fourth quarter of last year.
This rapid increase in demand has mostly been for the company’s primary loan product, a consumer loan for people with credit scores between 580 and 700, which LendingPoint calls “near prime.” These loans are between $2,000 and $26,500 with terms of 24 to 48 months.
“While our competition will occasionally dip down [to our level], they tend to be more comfortable in the 680 and up type of range, and that means that many of [the near prime] customers will come to us.”
With LendingPoint’s acquisition of merchant onboarding company LoanHero in December 2017, LendingPoint started offering a point of sale product to merchants at the begin of 2018. This loan product offers between $500 and $15,000 to consumers making specific purchases and these loans (with terms from from 12 to 60 months) have also been in very high demand, according to Lorimer.
This product has only been offered for six months, but Lorimer said that he would not be surprised if it becomes the larger contributor to overall originations within the next few years. For now, though, the company’s direct consumer loan product is responsible for the lion’s share of originations.
Since company issued its first loan in 2015, LendingPoint has originated more than 50,000 loans totaling more than $500 million. Headquartered in Kennasaw, GA, outside of Atlanta, the company employs about 160 people.
Kabbage and LendingPoint each separately announced today that they will soon be able to get funds into their customers’ business accounts instantly and 24/7 via their pre-existing bank debit card. Hopes for this are not brand new. Last October, OnDeck announced a partnership with Ingo and Visa that would provide this convenience to borrowers, although this has not yet come to fruition, according to an OnDeck spokesperson. This is also not Kabbage’s first foray into real-time loan funding.
“We launched [a real-time loan product] through the debit network three years ago and we were really excited about the results,” said Kabbage co-founder Kathryn Petralia . “Our customers really liked it, [but] our challenge was that we couldn’t get broad enough coverage. Only a small percentage of our customers were able to use it…so we’re excited about our partnership with Ingo because it gives us the ability to broaden this to about 90 percent of our customers.”
Kabbage has entered into a relationship with Ingo and has plans to make this service available to customers this summer. One might wonder why, on a weekend, a merchant needs money and can’t wait until Monday?
“Our customers are always looking to expedite the process,” Petralia said, “not because they’re desperate for cash, but because they really are desperate for time, and they don’t want to spend a bunch of time reconciling their bank accounts [and] making sure the funds have arrived. This is a much cleaner way for them to get access to capital.”
Meanwhile, as part of an announcement by LendingPoint today, the company said that later this year it will be able to “instantly disburse loans to approved borrower accounts through their debit cards, 24/7/365.” This will be facilitated through the TabaPay platform, which also enables LendingPoint borrowers to use their debit card to make loan payments.
LendingPoint announced today the launch of LendingPoint Merchant Solutions, a platform that allows merchants to offer loans to their customers for purchases ranging from furniture to medical procedures.
“When merchants offer consumer financing at the point of sale, they can remove friction and increase conversion,” said Mark Lorimer, Chief Marketing Officer of LendingPoint. “Our ability to offer shared risk plans, payment servicing plans as well as the full suite of promotional loan products, allows us to service all of a merchant’s customers from 850 all the way down to 500 FICO scores.”
Banks have long provided customers with loans for large priced items, but Lorimer told deBanked that it is very uncommon for non-banks to provide this service, particularly those that carry loans on their own balance sheet.
“The thing that’s different about our program is that in almost every single instance, when you apply for a loan at the point of sale, the first thing that happens is your credit is pulled,” Lorimer said. “This knocks down your credit for a while [and] if you’re in the near prime [FICO score range], 600, 680, you’re usually not going to be approved by a bank.”
Instead of pulling a customer’s credit score, LendingPoint Merchant Solutions does a soft credit pull, which has no impact on a customer’s credit, according to Lorimer.
“Depending on [what] the merchant is interested in, we can get close to 100 percent approval because we can take the loans between 600 and 850 ourselves,” Lorimer said.
LendingPoint offers point of sale loans that range from $500 to $15,000 with terms from 12 to 60 months. And the company responds to customers in a matter of seconds with an approval decision. Merchants get paid in full by LendingPoint Merchant Solutions at the point of sale and the customer does not always pay interest on the loan, as long as they pay within a promotional period set out by the merchant.
In December of last year, LendingPoint acquired LoanHero, which specialized in merchant onboarding, program management and reporting technology. LendingPoint Merchant Solutions combines LoanHero’s know-how with LendingPoint’s credit underwriting, risk management, and customer service expertise. The LoanHero brand has been retired and will now operate as LendingPoint Merchant Solutions.
LendingPoint was founded in 2014 and has issued nearly $500 million in consumer loans to more than 70,000 borrowers.
Lending Club announced its fourth quarter and full year 2017 earnings earlier this week. The report included a $92.1 million quarterly loss (which the company attributed primarily to a class action litigation settlement) and a fourth quarter net revenue increase of 20 percent year-over-year.
“This report had lights and shadows,” said Juan Tavares, Co-founder of LendingPoint. “On the regulatory front, [Lending Club] seems to be making a lot of headway,” Tavares told deBanked. “It speaks to the adoption of fintech by regulatory bodies, and really flattens the playing field for the rest of us.”
He also noted that, of course, it’s a positive thing for the alternative lending industry that Lending Club keeps growing. However, Tavares, whose company competes in the same space as Lending Club, sees fundamental flaws in his competitor’s business model.
“In my view, [Lending Club’s] underlying problem is that they don’t have alignment of interest between their stakeholders,” Tavares said. “At LendingPoint, we have a different approach. We look at it really as a balance sheet model, which means that we put everything on our books. We use our own equity. We leverage other investors’ capital, but we’re not an origination platform…Lending Club’s model primarily is that they have to continue feeding the beast, so to speak, in order to continue making their revenues. They don’t have inventory to continue generating assets or to monetize going forward. That’s a significant shortcoming in their model,” he said.
In Lending Club’s press release on Tuesday, CEO Scott Sanborn said, “2017 was a year of rebuilding and transforming our core business. We returned to growth and materially expanded and diversified our investor base. We’re continuing to invest in our people, technology and products to position us for the years ahead.”
Last year, Lending Club started taking on credit responsibility for some of its loans, which may signal a change in direction for the company.
But Tavares said that this still only accounts for less than ten percent of the company’s originations. He’s proud that LendingPoint, founded in 2014, has 100 percent of its loans on its balance sheet.
lendingpoint, etc etc. and will we begin to see funders open up their product lines to existing customers offering leasing, cc processing, etc in the near future?, , very good point. , , there's an even more interesting stat that sean missed in their earnings release. any guesses?...
lendingpoint, etc etc. and will we begin to see funders open up their product lines to existing customers offering leasing, cc processing, etc in the near future?...
lendingpoint mentioned in article be transferring cc debt or compounding cc debt with pers loan debt., , the #1 use of proceeds for lending club personal loans: to pay off credit card debt, of course nothing stops them from re-leveraging off those revolving lines., , the credit cycle will turn, it always does since eventually you run out of new credit i...