LendingPoint Secures Significant Credit Facility from Guggenheim Securities

Often in these pages we focus on the more established online lenders, many that have been around for 10 years or more now. But there are a small number of online lenders that launched more recently who are making a name for themselves.

One company that we believe has a bright future is LendingPoint. Founded in 2015, the Atlanta based company is a little bit different from many others in this space. LendingPoint is a near prime lender, a segment that has been largely underserved by both banks and fintechs alike. They are taking a different approach and recently announced their foray into point-of-sale finance with the acquisition of LoanHero

Today, the company announced that they have secured a $600 million credit facility from Guggenheim Securities. This is a significant milestone for the company as they have now secured a total of $1.1 billion in funding. Their last facility of $500 million was announced in September 2017 and was also arranged by Guggenheim Securities.

Tom Burnside, co-founder and CEO commented on the details of the facility which was included in the press release:

“The sizes, advance rates and interest rates of our credit facilities are a testament to our portfolio’s outstanding performance to date. This blended interest rate on this most recent facility is exceptionally low — LIBOR plus 467 basis points – and the advance rate is 90%, underscoring that our lenders’ believe that our credit-first, balance-sheet business model works. When we started LendingPoint, we knew that by successfully solving lending for people with credit scores between 580 to 700 – those we call ‘NearPrime’ – we would maintain strong capital markets support. This new Guggenheim facility and its pricing confirms that we’re succeeding.”

LendingPoint shared that they had processed 850,000 applications in the first quarter, totaling $9.2 billion in loans. The amount of interest they have from prospective borrowers is staggering. While many of the borrowers are declined, we did get a sense of their scale today. To date, LendingPoint has originated 50,000 loans totaling over $500 million. That already makes them a significant player in the near prime space.

Conclusion

LendingPoint continues to build their business, but the latest credit facility is a testament to the success of the company to date. They are certainly one of the lenders we are keeping a close eye on and believe have the potential to grow much further with the market they are serving.

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