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LendIt Fintech News: Daily Coverage of Fintech & Online Lending


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Equipment Financing Market to Get Boost From OnDeck

The small business online lending leader will offer equipment finance loans in 2019

December 19, 2018 By Mike McEnaney 1 Comment

Views: 203

Hoping to transform the traditionally slow-moving, opaque, and complicated process of the equipment financing market, online small business lender OnDeck has announced it will enter the market for small ticket ($250,000 and under) loans in this category. OnDeck will offer loans online of up to $100,000 to U.S. small businesses beginning in 2019.

Here is what CEO and Chairman, Noah Breslow said in the press release:

With more than a decade of success and over $10 billion funded to small businesses online, we believe OnDeck’s technology is primed to revolutionize how small businesses finance their equipment needs. We expect OnDeck equipment finance loans to quickly become a vital source of online financing for small business owners seeking simple, transparent equipment financing they can understand and utilize.

OnDeck’s decision to add only the third lending product in its history is based on a successful pilot program begun last summer and resulting data indicating that the equipment financing market is vulnerable to disruption. According to the Equipment Leasing and Finance Association, 68% of all capital purchases in the United States are financed, with small-ticket (under $250,000) equipment finance loans and leases representing $35 billion in originations in 2017. Applying for and receiving the majority of those small ticket loans remains a cumbersome, time consuming and paper-based process. That is a similar scenario to the market for small business loans that OnDeck first began disrupting in 2008.

In 2019, OnDeck will begin making its own equipment finance loans, ranging from $5,000 up to $100,000, with terms ranging from 24 to 60 months, secured by new and used equipment. OnDeck plans to offer only equipment finance loans, rather than leases.

OnDeck also announced the appointment of Mark Erickson as Vice President of Equipment Finance. Erickson is a veteran of the equipment finance market, previously serving in executive roles in sales, operations, syndications, and risk at Key Equipment Finance, Inc., a unit of Key Corp. He was also the managing director of the firm’s Australia and New Zealand subsidiary from 2000 to 2004. He had this to say about his new position:

I look forward to working with the team to leverage OnDeck’s online originations and underwriting technology to deliver speed and convenience for small business owners seeking equipment finance loans. With speed, service and transparency, we are poised to transform this market to the benefit of small businesses.

Filed Under: Investing/Lending Tagged With: Equipment Finance, fintech, OnDeck, online lending

Views: 203

Setting Up LendingClub’s Automated Investing Tool

LendingClub has recently updated the way users can setup automated investing within their account.

May 2, 2018 By Ryan Lichtenwald 1 Comment

Views: 233

In our last post and accompanying video we outlined how to setup a LendingClub account in 2018. One of the benefits of doing this was being able to see all of the recent changes LendingClub has made to the investor experience.

In the latest video we review the interface which allows LendingClub investors to enable automated investing. This functionality has been around for quite some time, but LendingClub has changed the way it looks from a user’s perspective.

In this video I discuss:

  • The three ways you can invest in LendingClub loans
  • The benefits of LendingClub’s automated investing tool
  • The options within automated investing including custom mix and platform mix
  • How fast $5,000 was deployed through automated investing

Now that funds have been invested in LendingClub loans I am beginning to receive principal and interest payments. Our next post in this series will focus on the current performance of the account.

If you have any questions about automated investing or opening up a LendingClub account please let us know in the comments below.

Filed Under: Investing/Lending Tagged With: 2018, automated investing, lendingclub, review

Views: 233

Overview of P2P Automation and Analytics Sites – Part 2

February 18, 2015 By Ryan Lichtenwald 10 Comments

Views: 967

There is an ever increasing number of websites dedicated to aiding in analytics and investing in Lending Club and Prosper. In part two of this comprehensive two-part series (click here for Part 1) we will look at all of the popular tools that investors use today (there are ten in all) in order to backtest strategies, automate their investments and analyze data. Analytics and data has been a large part of p2p lending from the start and investors are always looking for an advantage to potentially maximize returns. Investment automation allows for a much better investment experience versus selecting notes on the platform by hand.

BlueVestment Logo

BlueVestment specializes in automation strictly for LendingClub. Through BlueVestment, users are able to automate investing in notes using credit models from P2P-Picks. P2P-Picks has created their own models based on historic data from Lending Club and Prosper. Investing using either the Profit Maxmizer or Loss Minimizer models is a hands off method of investing in Lending Club. As new data becomes available, the models are updated accordingly to achieve the results of the respective model.

Users can also opt to create their own basic filter criteria using the 22 attributes available to them.  In addition, users can create advanced filters using the node builder.  This allows for a customized investing experience with different operators as shown below.

BlueVestment Node Builder

Using Note builder to select criteria.

BlueVestment Advanced Filter

Example of an advanced loan filter.

BlueVestment also has a high level dashboard which includes investment amount, available loan distribution by grade and total loan availability by grade. BlueVestment is a completely free service.

PeerTrader Logo

PeerTrader currently offers automation and charting specifically for Prosper with Lending Club integration coming soon.  They are currently in open beta and will be free for anyone to use until they officially launch.  As of 2015, they are now an SEC Registered Investment Adviser which makes them one of two public retail tools that are an RIA.  PeerTrader has just completed their integration with P2P-Picks, which is publicly available when you create a PeerTrader account. [Read more…]

Filed Under: Investing/Lending Tagged With: BlueVestment, data analytics, Interest Radar, Notient, p2p analysis, PeerToPeerQuant, PeerTrader

Views: 967

A 23 Year Old Backed By Mark Cuban, Eric Schmidt, and Peter Thiel Leads Upstart to Take on Lending Club and Prosper

April 23, 2014 By Jason Jones 16 Comments

Views: 2,142

upstart
At 23 years old, Paul Gu has attended Yale, been awarded a $100,000 grant as a Thiel fellow, co-founded Upstart, attracted millions in venture capital money, and is earning a 6-figure salary as Head of Product. Wow – what were you doing at 23?

Surprisingly, Paul found it nearly impossible to get a good rate for a loan. The banks wouldn’t lend, Prosper rejected him, and Lending Club offered him a loan with an interest rate in the high 20s. What gives? Using traditional credit scoring metrics, Paul has less than 3 years of credit history and is deemed high-risk.

Paul and his team at Upstart came to the realization that he is not alone and that there is an entire category of select “thin file” borrowers who have been overlooked by the system. These are recent graduates who have entered into the workforce with very promising career trajectories.

“We’re identifying prime borrowers before anybody else sees them,” said Dave Girouard, co-founder and CEO of Upstart.

In addition to credit and salary data, Upstart uses education-related variables to predict a borrower’s earning potential, employability and their propensity to repay the loan.

“We want to support those who just finished their education and are starting a job,” said Girouard, “In addition to looking at [your credit] and your income, we look at where you went to college, what your area of study was, how you performed academically.”

Since early 2013 Upstart has originated $3.5 million worth of income-sharing agreements to 309 people backed by 2,192 lenders. Upstart has used their intelligence in the income sharing business to formulate their new product that is launching today.

Introducing the Upstart Marketplace

Starting today, Upstart has launched a marketplace much like Lending Club and Prosper to offer three-year standard term loans available in all 50 states. Borrowers can request loans of $5,000 up to $25,000, and interest rates can range from 6.5% up to 20% APR.

Upstart’s new product crosses the boundaries of consumer and student loans, which means borrowers can use the funds for pretty much anything: to pay off credit cards, retire student loans, or pay tuition for a course.

Upstart’s investor marketplace will be available to accredited investors only and will offer fractional ownership in $100 increments. As you can see in the screen shot below, Upstart loans are given a letter grade and interest rate along with a progress chart to monitor funding levels. Investors can view details of each loan, but will not be able to see the identity of the borrowers.

browse_loans

Upstart also levels the field among individual and institutional investors by making all loans available on equal terms. In contrast to Lending Club and Prosper, Girouard said, all investors have access to every published loan since there is only a single pool of loans. Upstart’s platform offers lenders the ability to create filters for loans in which they’re interested. The investor, then, can automatically make a bid for those types of loans as they become available.

“Investors can set up as many rules as they want,” such as setting the maximum amount, risk grade of the loan, or even how the loan is (claimed to be) used, according to Girouard.

Borrower Acquisition Strategy

“We’ll have a steady flow of borrowers,” he continued. Upstart already has partnered with 13 coding bootcamps, which normally aren’t eligible for education loans, in the United States.

Borrowers, once verified and approved, can receive funds within 7 days, and can opt to defer their first payment for 3 or 6 months.

Aside from being able to discover early prime investments, Upstart has also structured itself to bolster loan repayment by not imposing fees for early repayment, and by educating borrowers on their finances and on how to improve their credit.

This education push has already paid off for Upstart’s investments, where they’ve “seen 3,056 unique repayments to backers in 14 months without a single default.”

“We understand that our borrowers are recent graduates, so we’re adding an educational component,” said Girouard.

Upstart is Well Positioned for A Borrower’s Life Cycle

Upstart is using educational data in a new way to bring something unique to market. They are able to expand the prime borrower market by uncovering a large overlooked pocket of borrowers. They are also in a great position to establish themselves early with borrowers who will need credit for many of life’s major purchases like a new car or a new home. While nothing has been announced, we can see how Upstart may be in a position to expand their offerings to other lending categories over time.

Paul Gu will be speaking at LendIt on May 6, and his panel will be available by webcast. We hope that he posts his loan request on Upstart. We will be the first in line to fund him!

Correction: The above post misidentified Paul Gu’s title. He is the Head of Product at Upstart. Also, Paul attended Yale University and has not graduated.

Filed Under: Investing/Lending, Peer to Peer Lending, Student Loans Tagged With: consumer, marketplace, thin file, Upstart

Views: 2,142

My Quarterly P2P Lending Results – Q3 2012

October 15, 2012 By Peter Renton 16 Comments

Views: 43

Every quarter I share in detail the returns I am receiving from my p2p lending investments at Lending Club and Prosper. I do this for several reasons. One, return on investment is what interests most readers. I also like to provide a level of transparency so everyone can see that I don’t just write about p2p lending, I am truly committed to it. Finally, it makes me accountable – I know that every quarter I need to display my returns for the world to see.

I currently have a total of six different accounts that are detailed in the table below. I provide my starting and ending balances, any additions I made to the accounts, total interest earned and my real return calculated by the XIRR method. The Return on Site shows the return that was displayed at Lending Club or Prosper at the end of the quarter.

AccountBalance 9/30/11AdditionsBalance 9/30/12Net InterestXIRR ROIReturn on Site
Lending Club Main $11,811.79 $14,000.00 $28,260.28 $2,448.49 12.56%10.87%
Lending Club Roth IRA $5,121.46 $-$5,899.12$777.6615.18%16.72%
Lending Club Trad IRA $59,950.56 $- $64,231.80 $4,281.24 7.14%8.52%
Lending Club Roth IRA - PRIME $15,356.87 $-$16,231.96$875.095.70%8.07%
Prosper Main $5,490.52 $40,000.00 $50,654.07 $5,163.55 16.35%16.48%
Prosper - 2 $2,164.60 $- $2,604.17 $439.5720.31%19.10%
Totals $99,895.80 $54,000.00 $167,881.40 $13,985.60 10.41%

Below is a brief discussion of each of the six accounts in the table. [Read more…]

Filed Under: Investing/Lending Tagged With: Lending Club, Prosper, Quarterly Results, ROI, XIRR

Views: 43

Revisiting the U-Haul Investors Club

September 24, 2012 By Peter Renton 34 Comments

Views: 1,424

Truck and trailer from U-Haula Investors Club

It was almost a year ago when I first wrote about the U-Haul Investors Club. This is the peer to business investing option at U-Haul where anyone can invest in their trucks and equipment. It is secured lending where an asset backs your investment.

I thought it was time to revisit them and see how they were getting along. When I last spoke with Jim Shoen, Vice President at Amerco (the parent company of U-Haul) back in October last year they had done around $7 million in loans in their first nine months.

Today, they are at $18 million in total loans issued and their monthly volume is just under $1 million. There are also more loan offerings now than there was a year ago. Currently, there are seven different options for investors with terms ranging from a 2-year loan at 3% for a utility dolly up to a 30-year term at 8% for some real estate.

New Account Options: IRA and Coverdell Accounts

This year they have made several different account options available for investors. Recently they added both Traditional and Roth IRA options that is run through the custodian Oxford Life Insurance Company. They also offer UGMA/UTMA custodial accounts as well as Coverdell Education Savings Accounts. Business accounts and Trust accounts are accepted as well.

[Read more…]

Filed Under: Investing/Lending Tagged With: U-Haul Investors Club

Views: 1,424

An In-Depth Look at Investor Service Fees

September 19, 2012 By Peter Renton 31 Comments

Views: 3,072

No investor likes fees. But for many investments, including p2p lending, fees are a part of life. The topic of investor fees at Lending Club and Prosper is not one that has been covered in depth anywhere until now.

This is detailed post that took me a long time to put together but if you read the entire post you will have an excellent understanding of how investor service fees work. But before we get started here is a quick primer on fees. All investors pay a 1% service fee . But how this fee is calculated differs at both companies. We are going to be looking at these differences and how it impacts investors at both companies.

Lending Club Investor Service Fees

Every time a borrower makes a payment Lending Club takes a 1% service fee. This fee is rounded up or down to the nearest cent with a minimum fee of $0.01. This fee is a fixed rate and will be charged on any payment whether it is a regular payment, partial payment or a loan payoff. This doesn’t mean that your returns are reduced by 1%, in some cases it will be more and in some cases less.

Here is the explanation of how these fees work from the Lending Club site. This explains why the impact of the 1% fee is in fact less than 1% in most cases:

[Read more…]

Filed Under: Investing/Lending Tagged With: Lending Club, Prosper, service fees

Views: 3,072

Get a $1,000 Bonus with a New Prosper Premier Account

September 6, 2012 By Peter Renton 23 Comments

Views: 84

Prosper Premier p2p lending investment account

I first wrote about Prosper’s Premier service back when it was introduced earlier this year. At the time I said it was a good move by Prosper because there are many investors who like the potential returns offered by p2p lending but don’t want to go to the trouble of selecting loans themselves.

If you are this kind of investor and you have been considering Prosper then there has never been a better time to start investing. Prosper is offering a $1,000 bonus to the first 25 SLN readers who sign up for Premier and invest at least $25,000. All the details are below.

How Prosper Premier Works

Before we get into the details of this bonus let’s first take another look at the Premier service. Prosper bills it as “the fastest, most convenient way to earn great returns”. You choose a couple of parameters including your level of risk and Prosper manages your investment for you.

Here are the steps needed to open a Premier account:

  1. Download the Order Form from Prosper’s website.
  2. Choose a target allocation based on the different loan grades from AA down to HR.
  3. Allocate a percentage to different loan terms (1, 3 and 5-year) or just select all loan terms.
  4. Choose the maximum dollar amount to invest per loan.
  5. Decide whether to reinvest payments or not.
  6. Fill out funding instructions.

[Read more…]

Filed Under: Investing/Lending Tagged With: Prosper, Prosper Premier

Views: 84

The Collections Procedure at Prosper

August 29, 2012 By Peter Renton 63 Comments

Views: 4,489

When I was at Prosper headquarters earlier this month I sat down with Nancy, the operations manager, who is also in charge of loan collections. She walked me through the collections procedure they follow for all borrowers who become past due.

For a start she said that around 98% of borrowers are on an automatic ACH withdrawal so Prosper is alerted immediately if there is not enough funds to make the loan payment. Here is the procedure they follow when that happens:

  1. With an ACH failure an email is immediately sent to the borrower.
  2. Make two more attempts at ACH payment, notifying the borrower each time there is a failure.
  3. Make regular phone calls to the borrower until they are able to get an answer. Try and work out some kind of payment on the loan.
  4. If after 30 days no payment has been made hand off borrower to the collection agency, Amsher.
  5. Amsher will send letters and continue to make phone calls. Amsher emphasizes the peer to peer aspect of this debt to try and persuade the borrower to pay back the loan.
  6. If Amsher is unsuccessful after 120 days past due the loan is charged off.
  7. The loan is then often handed to a different collection agency, IC System, where they continue to try and collect on the charged off loan.

The collection process at Prosper is not set in stone. They are always working to try and improve their success rate. Right now Prosper is testing manual phone calls rather than using an auto-dialer. This is less efficient but results in fewer hang-ups. They are also testing different wording in their collection letters.

[Read more…]

Filed Under: Investing/Lending Tagged With: collections, Prosper

Views: 4,489

More Loans Means More Choices for Investors at Lending Club

August 27, 2012 By Peter Renton 30 Comments

Views: 890

Number of available loans at Lending Club

For the first half of this year the number of available loans at Lending Club hovered between 700 and 1,000 loans. Occasionally the number went over 1,000 but it averaged somewhere around 800 loans available to investors at any one time.

But in the month of June this changed. By June 21st there was over 2,000 loans available on the platform, a previously unheard of number. In late July at one stage there was over 2,500 loans available – about triple the historical average. I just took this screenshot above this morning and we are at 1,842 loans right now, below the heady numbers from last month but still more than double the average for this year.

The LC Advisor Funds Investing Huge Amounts in the First Week

Why the big increase in available loans? Simply stated, it is driven by investor demand. For the last several months we have seen this trend where in the first few days of the month at Lending Club very large volumes of loans are issued. In the first week of August that number was the largest ever – over $30 million.

[Read more…]

Filed Under: Investing/Lending Tagged With: LC Advisors, Lending Club

Views: 890

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ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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