Online lending, P2P lending, and securitization of consumer, student loans
KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-4 Trust. As expected, excellent ratings. This is SoFi’s 20th rated securitization.
Stripe debuts corporate credit cards. First, Stripe Capital. Now, credit cards. Stripe is making huge inroads into SME lending.
College Ave completes $300 million securitization of private student loans. Congratulations! This is College Ave’s third and largest securitization.
Deregulating Fannie and Freddie. The treasury department has issued a report on reforming the housing sector. This is an important report, which includes a section defining the “limited role for the federal government.” It discusses single-family mortgage lending, multifamily mortgage lending, protecting taxpayers against bailouts, and promoting competition in the housing finance system. This could be one of President Trump’s most significant achievements, with implications for online lenders. A must-read.
Average FICO score hits all-time high. This likely means a diminished market share for alt lenders who target subprime markets, but for alternative lenders who use FICO scores it can be good news.
The current state of the small businss lending sector. From Lend Academy.
OnDeck CEO to keynote at Lend360 this year.
Judgment for $6,593.50 entered for OnDeck v. Beautyshea.
Consumer debt surges.
Kabbage launches new small business revenue index.
Patriot Financial leads $15 million for Numerated.
TBF Financial buys $60 million in commercial debt from online lender.
50 most expensive towns in America.
Coinbase invests in decentralized finance.
30-somethings guide to passive income.
PeerStreet wins CRETech award.
Zillow hires new coo.
Balboa Capital hires 125 employees.
News SummaryUnited StatesKBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-4 Trust (Yahoo! Finance), Rated: AAAOnDeck CEO Noah Breslow to Deliver Keynote Address at 2019 LEND360 Conference (GuruFocus), Rated: ACase activity for On Deck Capital, Inc. vs Beautyshea, LLC on Sept. 9 (Pennsylvania Record), Rated: BPayments giant Stripe debuts a credit card in its latest step into the financing fray (TechCrunch), Rated: AAACollege Ave Student Loans Completes $ 300 Million Securitization of Private Student Loans (Crowdfund Insider), Rated: AAAThe Deregulation of Fannie and Freddie; Rate Cuts; “Full Stack” Banks (PeerIQ), Rated: AAAAverage FICO score hits all-time high (CNBC), Rated: AAAU.S. Consumer Debt Surges on Jump in Credit-Card Balances (Bloomberg), Rated: AKabbage Launches New Small Business Revenue Index (Crowdfund Insider), Rated: AThe Current State of the Small Business Lending Sector (Lend Academy), Rated: AAAPatriot Financial leads $ 15 million round for Numerated (American Banker), Rated: ATBF Financial Buys $ 60 Million in Commercial Debt from Major Online Lender (PR Newswire), Rated: ALendingTree Ranks the 50 Most Expensive Towns in America (NewKerala), Rated: ACoinbase Joins DeFi Trend With 2M USDC Investment (Cryptovest), Rated: AThe 30-somethings guide to creating passive income (Ladders), Rated: APeerStreet Named CRETech 2019 Real Estate Tech Award Winner (Crowdfund Insider), Rated: BZillow chooses Impac Mortgage COO Rian Furey to lead mortgage expansion (Housingwire), Rated: BBalboa Capital Continues Accelerated Growth, Adds 125 New Employees in First Half of 2019 (Yahoo! Finance), Raated: AUnited KingdomWhy crowdfunding may not be the great democratising force in investment after all (The Conversation), Rated: AAASonovate raises £110m to drive invoice finance (Fintech Futures), Rated: ASpotcap find 77% of SME brokers are upbeat about Brexit (AltFi), Rated: AFCA urges firms to prepare for no-deal Brexit and launches helpline (P2P Finance News), Rated: AForeign firms eyeing P2P market entry (P2P Finance News), Rated: AH&M extends Klarna ‘buy now, pay later’ service to the UK (Fashion United), Rated: BNew SME services added to Starling Bank’s marketplace (AltFi), Rated: BChinaYirendai (NYSE:YRD) Issues Earnings Results (Mayfield Recorder), Rated: AAALexinFintech Secures $ 300 Million Private Placement of Convertible Notes with PAG (Crowdfund Insider), Rated: AIceKredit Raises $ 47M in Pre-Series C Funding (FINSMES), Rated: AThese Chinese Online Lenders Are Not For the Weak at Heart (GuruFocus), Rated: AHexindai Announces Support For Regulators’ Decision to Include P2P Platforms in Central Bank’s Credit System (Crowdfund Insider), Rated: BSequoia-Backed P2P Lender Huobank Collapses As Beijing Mops Up Online Finance Risks (China Money Network), Rated: AEuropean UnionBanks raise concerns ahead of ECB meeting (Irish Examiner), Rated: AFintech Europe Selects Eight Startups for its Fourth Batch (Yahoo! Finance), Rated: BInternationalTechnology Is Banks’ New Battleground (WSJ), Rated: AAAWirecard Teams Up With Credibly to Digitalize Funding Disbursements (Crowdfund Insider), Rated: APwC to AM industry: disrupt yourself or face extinction (City Wire Selector), Rated: AState of the Chain: Five Winning Use Cases for Blockchain in 2019 (U.today), Rated: AAustraliaHopes fintech inquiry will ‘validate’ bank competitors (The Sydney Morning Herald), Rated: AIndiaFive Ways Artificial Intelligence Is Instigating Paradigm Shift In Online Lending Space (Via.news), Rated: AAAAsiaChinese P2P Lending Companies Ventures to Vietnam (LearnBonds), Rated: AAAMENAThe opportunity of peer-to-peer lending in Lebanon (Executive Magazine), Rated: AAALatin AmericaSoftBank in talks to invest in Latam venture capital funds (Reuters), Rated: AAAProptech Flat raises US$ 4.5 million pre-seed round led by ALLVP (Contxto), Rated: AAfricaNigerian online-only bank startup Kuda raises $ 1.6M (TechCrunch), Rated: AAACanadaPeer to Peer Lender Lending Loop Tops $ 50 Million in Loans (Crowdfund Insider), Rated: AAAPayBright Raises $ 34M in Growth Equity Financing (FINSMES), Rated: A
OnDeck today announced that Chairman and CEO Noah Breslow will be a keynote speaker at the LEND360 Conference in Dallas, Texas on Thursday, September 26, 2019. Mr. Breslow will discuss industry trends in alternative data and how they are improving many aspects of online lending to small businesses.
‘Judgment Entered For $6,593.50 On 09-09-2019 236 Notice Of Judgment Sent 09-09-2019’
Last week, when the popular payments startup Stripe made some waves with its first move into money lending through the launch of Stripe Capital, we reported that the company was also soon going to be launching a credit card. Now, that news is official. Today, the company is doubling down on financing with the launch of corporate cards for business customers.
Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $300 million securitization of private student loans, its third securitization and largest to date. According to College Ave, the transaction was oversubscribed attracting a broad and diverse group of repeat investors and new participants. Barclays and Goldman Sachs were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.
This week, the Trump administration released their long awaited housing finance plan that will privatize Fannie Mae and Freddie Mac.
The plan would require a significant recapitalization – up to $180 Bn.
Read the full report here.
Source: Federal Reserve, PeerIQ
For the first time, the average national credit score has reached 706, according to FICO, the developer of one of the most commonly used scores by lenders.
U.S. consumer borrowing swelled in July by the most since late 2017 as Americans carried larger credit-card balances to fund both everyday and online purchases.
Total credit rose by $23.3 billion from the prior month, exceeding all estimates in a Bloomberg survey of economists, Federal Reserve figures showed Monday. Revolving debt outstanding increased by $10 billion, also the most since November 2017, while the growth of non-revolving credit was little changed from a month earlier.
Global financial service platform Kabbage announced this week the launch of its new Small Business Revenue Index. According to Kabbage, the index has two million live data connections the platform maintains across its customer base of more than 200,000 small businesses.
The companies that I view as pioneers in this space are Kabbage and OnDeck.
Although Kabbage and OnDeck were early to small business lending there are many other names in this space with varying models and scale including Funding Circle, Streetshares, Fundbox, BlueVine, Biz2Credit, Fundation and Credibly to name a few. LendingClub also has a small business lending operation but they primarily work with partners Funding Circle and Opportunity Fund today to originate these loans.
The Challengers of Small Business Lending
Probably the most recognizable name is PayPal and the Working Capital product which, according to deBanked, has surpassed OnDeck in small business lending volume.
Numerated, the loan technology company that incubated inside Eastern Bank and spun off on its own in May 2017, has raised $15 million from bank investment fund Patriot Financial Partners. Existing investors Venrock, Fintop Capital and Hyperplane also joined the round.
TBF Financial purchased nearly $60 million in non-performing loans from a major online small business lender in recent transactions, CEO Brett Boehm announced today.
TBF bought the pools of post-charge-off loans as the highest bidder in transactions arranged through multiple brokers. In most cases, the company purchases directly from alternative lenders, equipment leasing companies and banks.
No. 1 Vineyard Haven, Mass.
Total population 17,321Median individual income $39,045Median home value $674,600Affordable housing costs for a median income earner $911Calculated mortgage payment for a median priced home $2,767Median rent payment $1,441Home affordability deficit -$1,856Rent affordability deficit -$530
The DeFi trend is accelerating and gaining acceptance, with Coinbase joining the fray. The leading brokerage has created the Coinbase Bootstrap Fund, to boost DeFi projects. Coinbase will invest in two projects, the Compound crypto lending scheme, and the dy/dx crypto derivative exchange.
You might not have $30,000 saved up to buy a rental property right now, but do you have $500? The beauty of REITs like DiversyFund is you can start investing for the amount of money you might drop on a new pair of shoes.
There are public and private REITS as well as funds classified as real estate crowdfunding. Compare your options and find the best one that works for you.
Real estate investment platform PeerStreet announced on Tuesday it won first place in CRETech’s 2019 Real Estate Tech Awards (RETAs for the Information & Intelligence – Crowdfunding category.
Zillow announced Monday that it is naming Rian Furey president of Zillow Home Loans.
Finance tech provider Sonovate is looking to expand internationally and deploy more working capital to SMEs and mid-market businesses after raising £110 million, reports Jane Connolly.
Over three-quarters of commercial finance intermediaries in the UK expect the number of loans they broker to increase after Brexit, with more than half saying the number will rise “by a lot”.
In July Berlin-based online lender Spotcap asked 132 UK brokers, accountants and advisers about the future of SME finance in the UK, the results of which it published today as part of a report entitled The State of Commercial Finance in the UK.
FIRMS should prepare for the possibility of a no-deal Brexit, says the Financial Conduct Authority (FCA), as it launches a dedicated helpline for businesses.
The City watchdog, which oversees the peer-to-peer lending market as well as the rest of the financial servcies sector, says firms who have not prepared appropriately for the UK leaving the EU without a deal may see an impact on their business.
REGULATORY consultancy Bovill has reported a steady stream of interest from new entrants to the peer-to-peer lending market, particularly from overseas firms.
Brown attributed the slowdown to the fact that P2P is a more mature market, meaning there was “less of a gold rush” for new players.
Swedish fast-fashion giant H&M has extended its partnership with payment provider Klarna to the UK market, offering Brit shoppers the option to ‘buy now, pay later’.
Digital Risks is an insurance provider for small and medium-sized digital businesses, including cover for specific threats like commercial legal protection, cyber security, management liability, employers liability, public liability and professional indemnity.
While CyberSmart is a platform for SMEs to identify digital weaknesses and achieve their Cyber Essentials Certification, the government-backed accreditation for companies looking to protect against cyber threats.
Yirendai posted its earnings results on Tuesday, September 3rd. The technology company reported $0.24 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.48 by ($0.24), Morningstar.com reports. Yirendai had a return on equity of 32.93% and a net margin of 15.30%. The firm had revenue of $322.89 million for the quarter.
Chinese consumer financing platform LexinFintech announced on Wednesday it has entered into a convertible note purchase agreement with PAG issue and sell convertible notes in an aggregate principal amount of $300 million through a private placement.
IceKredit, Inc., a Los Angeles, CA and China-based credit risk and credit management company, raised $47m in pre-Series C funding.
Beijing-based online lender Yirendai (NYSE:YRD) and Shanghai-based Paipaidai, or PPDAI Group (NYSE:PPDF), shares have been pummeled down to their lowest levels in the past year. Yet aside from receiving credit lines from large Chinese institutions amid China’s crackdown on fraud lending in their industry, both lenders appear to remain in a healthy state.
PPDAI — the older and bigger of the two lenders — came out strong in its recent quarter, beating earnings expectations. The $1.2 billion online lender reported it had 29% year-over-year growth in loan origination volume to $3 billion, compared to just 1.6% growth a year earlier.
Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Tuesday its support for the decision by industry regulators to include the country’s P2P platforms in the central bank’s credit system. The online lender reported that it believes this as a positive move for the P2P industry.
The president of Germany’s powerful savings banks association, community lenders that dominate the country’s shopping streets, joined Dutch bank ING yesterday in criticising the ECB’s loose monetary policy.
Its 50 million customers have increased their savings by almost 5% since last year to €965bn which is roughly the size of the Dutch economy. With lending amounting to about €860bn, the banks are left with a chunky unused surplus.
Fintech Europe, Plug and Play’s fintech-focused innovation platform based out of Frankfurt, Germany, announced today the eight startups selected for its fourth batch. The platform has grown its partner base to 11 Financial Institutions since its inception in May 2018. Together with Deutsche Bank, TechQuartier, BNP Paribas, Nets Group, UniCredit, Aareal Bank, Abanca, Danske Bank, DZ Bank, Elo, and Finablr, it runs two 12-week innovation programs a year.
CashDirector SA is a technology company providing SMEs and banks with a Digital CFO integrated with on-line banking, helping with SMEs manage cash flow and accessing financing.
Credit Kudos is a credit bureau that uses financial behaviour to measure creditworthiness.
European banks are spending vast sums on technology—but it may not be enough to defend against the incursions of bigger, richer American rivals.
U.S. lenders already dominate investment banking in Europe. The big risk for the continent’s banks is that slicker tech could give their American rivals a platform to make gains in lending to companies—the Europeans’ traditional stronghold.
This year, Europe’s banks plan to make technology investments worth in aggregate $77 billion, according to consulting firm Celent. That compares with $105 billion for their U.S. rivals. Faster, more seamless trading systems have long been a priority, but tech spending has shifted across business lines and from back office to front office. It can cover everything from maintaining decades-old systems to cutting-edge artificial intelligence.
Germany-based global provider of digital payments and commerce solutions Wirecard announced on Wednesday it is partnering with U.S. business funding fintech Credibly to digitalize funding disbursement. Wirecard claims to be one of the largest issuers of payout cards in the U.S. and is now offering fully digitalize solutions.
The European financial services industry is facing an ‘Amazonisation’ moment, in which those offering consumer-first solutions underpinned by sustainable finance will survive and the others will cease to compete.
That is the headline finding of 52-page report co-authored by PwC Luxembourg and Luxembourg for Finance, which investigated underlying industry trends and indicated that the European market is losing ground on its US and Asian peers when it comes to innovation and assets.
Predictably it was Binance that stole the limelight, with the surprise launch of its eponymous lending platform, which was unveiled on Monday, August 26, and then proceeded to fill its initial lending quota of 200,000 BNB and 10 million USDT in a matter of seconds two days later.
Dharma and Compound have announced new products, while Coinbase has hinted that this will be the next vertical it expands into.
Lenders can enjoy annualized interest of up to 15%, which is significantly better than the negative rates they are currently offered on fiat savings and on negatively yielding government bonds.
On Wednesday New South Wales senator Andrew Bragg successfully moved to secure a senate committee inquiry into the fintech and regulatory technology spaces, paving the way for a year-long review into how competitive Australia is in these sectors.
Chief executive of small business lender Lumi, Yanir Yakutiel, said the inquiry should focus on expanding the regulatory sandbox program, which is designed to help early stage fintechs test their ideas.
Currently, digital lending accounts for around 15% to 20% of the total lending market and could surpass 50% in coming years.
This business model boomed in China, but following a regulatory clampdown by authorities on risky financial practices, the number of fintech and peer-to-peer (P2P) lending platforms in the country dropped from about 1,900 a year ago to just 900 in May.
It now appears that some of these Chinese P2P lending companies have not necessarily disappeared. They simple ventured into new markets and in particular Vietnam.
According to the State Bank of Vietnam (SBV), there were 40 peer-to-peer lending companies operating in Vietnam as of March. Of these, 10 companies are from China.
Through conversations with Lebanese entrepreneurs, business owners, bankers, and politicians, I have had a number of eye-opening discussions into the challenges and opportunities faced by Lebanon’s SME ecosystem. Given the country’s long-standing tradition in financial services and its large banking sector, I believe fintech—with solutions such as peer-to-peer lending, machine learning to personalize insurance solutions, and the use of artificial intelligence for wealth management—stands as a serious contender to unlock the funding challenges faced by Lebanon’s SMEs.
Japan’s SoftBank Group Corp (9984.T) is in talks with venture capital firms in Latin America to invest hundreds of millions of dollars in their funds, a move likely to speed up spending of a $5 billion regional venture capital fund, three sources with knowledge of the matter said.
So far, SoftBank has only announced direct investments using the fund’s resources, injecting capital into Colombian delivery app Rappi, Brazilian lender Creditas, gym membership app Gympass and Mexican payments firm Clip, for instance.
Contxto – Not only is the Mexican real estate industry huge but also outdated with many inefficient processes. Counteracting this, a new Mexican startup, Flat, recently raised US$4.5 million in one of Mexico’s largest pre-seed rounds ever.
Nigerian fintech startup Kuda — a digital-only retail bank — has raised $1.6 million in pre-seed funding.
Canada’s first peer to peer lending platform for SMEs, Lending Loop, has topped CDN $50 million in loans, according to a post by Brendon Vlaar, co-founder and CTO of the company. Lending Loop provides investment opportunities in debt-based securities to both accredited and non-accredited investors.
PayBright, a Toronto, Canada-based fintech company, received a $34m equity investment from goeasy.