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. Articles by Srividya Kalyanaraman
Is Real Estate Finance Showing Returns? RealtyMogul Nods with $40 Million
May 23, 2016
LA-based real estate crowdfunding platform, RealtyMogul announced that its platform has enabled debt and equity transactions worth $200 million to date and has returned $40 million to investors.
The three year old firm has 80,000 members who have invested in 350 properties that are typically small-balance commercial real estate opportunities in the $1-5 million range. Some of its recent transactions include a $2.2 million first-mortgage loan on an industrial property in Alabama, a $1.5 million preferred equity contribution to a multi-tenant office building in Illinois, and a $1 million joint venture equity investment in a shopping center in Florida.
Some of the platform’s sponsors include Spirit Bascom Ventures which has invested over $10 billion including acquisition of The Edison Apartments, a mid-rise multifamily property in Chicago.
“Our goal has always been to democratize commercial real estate by enabling a new generation of investors to participate in real estate opportunities that were historically difficult to access,” said Jilliene Helman, CEO of the company in a news release.
China Ponzi Scheme: Central Bank Collects Data on Risks, Funds Deployed
May 23, 2016
The concern around online lending is global.
As a part of the crackdown on Chinese P2P lenders, the central bank is collecting data on the process of assessing risk and deploying capital for loans made online. The rapid expansion of new players and the subsequent fraud cases that followed, forced the government to take control.
Last week, (May 16th), Chinese authorities arrested Xu Qin, owner of Shanghai-based wealth management firm, Wealthroll Asset Management Co. who confessed that his company still owed 5.2 billion yuan ($797 million) to 12,800 investors. And before that, in April the police arrested 21 executives of Shanghai-based Zhongjin Capital Management, that promised retail investors double-digit returns for short-term projects.
The can of worms was opened with the shakeup of Ezubao, the Chinese P2P lending site which duped 900,000 investors out of $7.6 billion in February this year. Following which, the Chinese police were ordered to shut down illegal online lending sites and take swift action against suspects.
The Ministry of Public Security also launched an online platform in a quest to garner more information from the public and warned of P2P lender defaults in June, when payments will be due.
After Prosper, Avant Lays off 60 Employees, Stalls Expansion Plans
May 20, 2016
Lending Club tumbled, Prosper laid off 171 employees, OnDeck lost $12 million in Q1. Who’s next? Avant.
The Chicago-based lender, popular among subprime borrowers, is laying off 60 employees and putting some of its plans on the back burner, raising more alarms for the industry, the American Banker reported.
Avant’s loan volume dropped 27 percent in the first quarter and the number of loan offers fell 63 percent between December 2015 to February this year. The company plans to delay the launch of its auto loan refinancing program announced in March this year, the same month it crossed $3 billion in personal loan funding. It announced plans to refinance auto loans ranging between $4,000 and $35,000 with APRs between 10.11 percent and 25 percent ranging over 2-5 years.
The news comes in light of rising auto loan balances. Vehicle loans and leases held by subprime consumers increased by 11 percent in Q1 this year and for the first time since the recession, balances on auto loans hit the $1 trillion mark, up from $905 billion last year.
Throwback to 2008? Credit Card, Auto Debt Soars to $1 Trillion
May 20, 2016Subprime borrowing is back, this time with auto loans.
Vehicle loans and leases held by subprime consumers increased by 11 percent in Q1 this year and the for the first time since the recession, balances on auto loans hit the $1 trillion mark, up from $905 billion last year.
Non-bank finance companies and credit unions saw the largest spike in loan growth market share with 26 percent and 16 percent respectively.
“With more and more consumers relying on financing, it is important for lenders to keep a close eye on delinquency trends to ensure the market remains healthy,” said Melinda Zabritski, senior director of automotive finance for Experian, which conducted the study.
However there is some respite in the overall percentage of total delinquent loans remains relatively low when compared to pre-recession levels.
And it’s not just auto loans that are soaring, credit card debt is also pushing the $1 trillion mark inching scarily close to recession peak of $1.2 trillion in 2008. According to Federal Reserve numbers, outstanding balances touched $952 billion in the first quarter, up 6 percent last year, and the highest level since August 2009.
Fora Financial Secures $53 Million Credit Facility
May 19, 2016
New York-based small business lender Fora Financial closed a $52.5 million senior revolving credit facility with a group of financial institutions led by AloStar Capital Finance that includes BankUnited, Customer’s Bank and First Tennessee Bank.
This credit facility will take care of Fora’s financing for the next three years and allow for expansion of the facility to $75 million, tripling the lender’s current borrowing capacity. The eight year old company has financed $450 million to 9,500 businesses to date.
“This facility will provide us with flexible, low-cost financing that will enable us to continue on our growth trajectory while offering even more attractive and innovative solutions to thousands of small businesses in need of capital,” said Andrew Gutman, Chief Financial Officer at Fora Financial.
In October of last year, founders Jared Feldman and Dan Smith sold a major stake to PE firm Palladium Equity Partners LLC which helped capitalize their balance sheet. The Palladium deal marked a milestone in the development of Fora Financial, a company with roots that date back to when Smith and Feldman met while studying business management at Indiana University.
SoFi Hires Ashish Jain, Trader Sacked by Deutsche Bank Last Year
May 19, 2016
If you get fired from a top investment bank pending a compliance probe, don’t worry. Things might still turn around, as it did for Ashish Jain, the former Deutsche Bank trader hired by SoFi.
SoFi hired Jain to bundle loans into bonds and sell them to investors. Deutsche Bank’s former CEO Anshu Jain is already an advisor to SoFi. Speaking of Ashish Jain’s appointment, Bloomberg quoted SoFi CEO Mike Cagney as saying,
“We are comfortable with Ashish’s character and integrity..we spent a lot of time talking with folks in the industry and concluded that he is a good actor.”
Jain was terminated as the former head of securitized product sales for Deutsche Bank in America after the bank found that he failed to comply with the bank’s policies after the bank fired junior traders for lying to clients on the pricing of commercial mortgage bonds.
Separately, the San Francisco-based lender closed a $380 million securitization deal. And earlier this month, the company’s subsidiary SoFi Lending Corp became an approved Fannie Mae seller and servicer.
