LendingPoint scores $600m financing deal

With this new deal, LendingPoint has secured up to $1.1 billion of senior credit financing in less than one year. In September 2017, the company announced it had secured an up to $500 million committed credit facility, also arranged by Guggenheim Securities.

“The sizes, advance rates and interest rates of our credit facilities are a testament to our portfolio’s outstanding performance to date,” said Tom Burnside, co-founder and CEO of LendingPoint.

“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 uses dozens of APIs to gather thousands of data points on each applicant. It has developed proprietary risk models that allow the company to get a more complete financial picture of the customer and approve more people who otherwise may have been overlooked by traditional FICO results. While the company lends to individuals across the credit-score spectrum, from 580 to 850, it focuses on NearPrime borrowers. LendingPoint processed more than 850,000 applications arising from borrowers requesting more than $9.2 billion in loans during the first quarter of 2018.

The funding announced today is the latest development in LendingPoint’s business that signals its rapid growth, which this financing will continue to fuel. In January 2018, LendingPoint announced it had acquired a point-of-sale (POS) lender’s technology platform. This platform formed the basis of LendingPoint Merchant Solutions, which LendingPoint unveiled in March to provide retailers and service providers — from orthodontists to car mechanics – POS financing.

“Our goal is to make LendingPoint a win-win-win business, meaning we align the interests of all our stakeholders: our borrowers, our merchants and our investors,” said Burnside. “Our portfolio delivers consistent results, and we’re providing loan products to many deserving yet underserved Americans, setting them on a more successful financial path.”

In addition to serving as sole structuring advisor on this credit facility, Guggenheim Securities also served as sole bookrunner. CBIZ MHM is the Administrative Agent. U.S. Bank National Association is the Note Agent and Paying Agent.

LendingPoint’s direct to consumer online loans range from $2,000 to $26,500 with terms of 24 to 48 months. Its point-of-sale loans range from $500 to $15,000, with terms from 12 to 60 months. Since it issued its first loan in 2015, LendingPoint has originated more than 50,000 loans totaling in excess of $500 million.