LendingPoint is a FinTech balance sheet lender working to create a better lending and borrowing experience by looking for more reasons to say "yes"--helping consumers across the credit spectrum, from 550 to 850 FICO, unlock access to affordable loans and live better financial lives. It combines data and technology to create a proprietary risk model that adds new, multi-variate dimensions to credit analytics beyond the traditional FICO scoring. This model allows the company to get a more complete financial story of the consumer in order to approve more people who otherwise may have been overlooked by traditional credit models based on FICO. Its LendingPoint Merchant Solutions platform provides merchants with a fully integrated retail finance technology to convert more customers at the point of sale.
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History
LendingPoint was founded in 2014 by Tom Burnside, Franck Fatras, Victor J. Pacheco, and Juan E. Tavares. The founders saw that the aftermath of the Great Recession was a polarizing force in consumer lending, as consumers were divided into either "prime" or "subprime" asset classes as defined by their FICO scores. Banks continued to compete for prime customers by offering low interest rates and loyalty programs, but consumers below the 700 FICO dividing line were grouped together and remained stuck between bank declines and very few responsible borrowing choices. The founders recognized financial behaviors and characteristics that were more distinctive than FICO scores, which defined an asset class that could be seen as an emerging market with predictive behaviors and risk profiles. LendingPoint was created with the goal of providing access to more affordable loans for these consumers with credit scores between 600-700, a class which LendingPoint names "NearPrime".
LendingPoint officially launched its first consumer loan product in January 2015. In October 2015, LendingPoint announced a $100 million credit facility with funds managed by the Tradable Credit and Direct Lending groups of Ares Management. Just two months later, LendingPoint signed an additional credit facility for $5 million of incremental financing with Aeterna Capital Partners. This money was raised to help the company expand its loan portfolio to even more consumers and grow with the demands of the market as it continued rollout across the U.S.
In August 2016, former American Express executive Houman Motaharian joined LendingPoint as Chief Revenue Officer. By the end of 2016, within two years of its public launch, LendingPoint had funded more than $100 million in consumer loans across 13 states.
In March 2017, LendingPoint announced that it would expand its consumer lending services nationwide through a partnership with Utah-based FinWise Bank and disclosed that it had extended nearly $200 million in consumer loans. The company was also awarded "Best Consumer Lending Product" by FinTech Breakthrough.
LendingPoint signed an exclusive partnership with ezVerify in June 2017 to provide a new service called ezCarePoint, which allows patients to predict their out-of-pocket expenses and apply for flexible payment plans and loans to cover the costs of medical procedures.
On August 22, 2017, LendingPoint closed an up to $500 million credit facility arranged by Guggenheim Securities. The company took down $138.5 million of the facility at the closing and on September 15, 2017, it took down an additional $32.7 million. This was one of the largest credit facilities raised in 2017 in the online consumer lending industry for a balance sheet lender, and it provided LendingPoint with additional capital to expand its products and services nationwide, at a significantly lower cost of funds. Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners, arranged the transaction and served as bookrunner. CBIZ MHM is the Administrative Agent, and U.S. Bank is the Note Agent and Paying Agent.
On January 11, 2018, the company announced that it acquired LoanHero, a fintech platform for point of sale finance. LoanHero's retail financing technology allows merchants to close more transactions while providing consumers more payment options. LendingPoint noted that LoanHero would help accelerate the company's expansion into point-of-need and point-of-sale financing, by combining LoanHero's merchant onboarding and reporting tools and installed merchant base with LendingPoint's credit underwriting and risk management expertise. Terms of the deal were not disclosed.
In February 2018, LendingPoint announced that Citi veteran Tony Martino joined the company as CFO.
To-date, the company has issued almost 70,000 loans, totaling nearly $500 million in consumer loans.
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Products
LendingPoint built a proprietary credit risk model which allows it to offer more loans to consumers with FICO scores between 600-700. Using hundreds of data points, LendingPoint looks at a person's complete financial picture, taking into consideration credit history, employment history, earning potential, education and even online social profiles to determine creditworthiness.
LendingPoint provides consumer installment loans ranging from $1,000 to $26,500, with terms from 24-48 months. Credit applications can be completed online or via mobile devices, and credit decisions are made in seconds. In most cases, LendingPoint transfers funds into a customer's bank account within one business day. Annual percentage rates range from 15-35% based on an individual's credit and payment performance. LendingPoint charges an origination fee of 5%.
Installment loans can be used for a number of purposes including home and car repair, renovations, weddings, medical or veterinary bills, travel, or debt consolidation.
In partnership with ezVerify, LendingPoint provides patients and medical providers a service called ezCarePoint, which aims to make it easier and more affordable for consumers to pay their medical bills. ezCarePoint helps patients verify their insurance coverage and payment responsibility for health care services before the procedures take place, preventing incidents where patients unexpectedly find themselves responsible for bills outside of their insurance coverage. If the patient can't pay the out-of-pocket costs up front, they can apply for a loan and payment plan quickly and easily from the ezCarePoint platform. Patients are notified of approvals in a matter of seconds, and upon approval, LendingPoint pays the loan proceeds to medical practitioners within one business day to pay the patients' out-of-pocket medical costs up front.
The LendingPoint Merchant Solutions platform provides merchants a fully integrated, one-stop retail financing product to convert more customers at the point of sale. LendingPoint Merchant Solutions combines the merchant onboarding and reporting tools acquired in January 2018 from LoanHero, with LendingPoint's credit underwriting and risk management expertise.
Awards
US News & World Report Best Personal Loans of 2018
Nerdwallet Best Personal Loans of 2018 2017
FinTech Breakthrough Awards: Best Consumer Lending Product
Partnerships
LendingPoint is a finance provider for customers of Credit Karma, LendingTree, and 150 other origination partners.
References
External links
- Official website
Source of article : Wikipedia
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