Investors are continuously looking for new asset classes, equipment finance is one of the stronger performing areas and the presentation by Patricia Voorhees of The Alta Group at LendIt USA 2017 explains why this segment is ripe for capital; the total market is $1.7 trillion and currently only about $300 million is financed through term leases or loans; most equipment is put on some other form of credit like a credit card; the more technology that is enabled and the more chances to make a loan at the point of sale will allow for the market share to grow; Patricia also pointed out that ABS deals in the equipment space outperformed all other categories because the nature of the equipment is essential use and the integration of the finance providers in the transactions; equipment finance could be the next big opportunity, we will have to wait and see how it shakes out in the next couple of years. Source
Synthetic fraud is when fraudsters use a collection of information to create a fake identity for fraudulent loan applications; data verification regulations are also making synthetic fraud more challenging to detect; Auriemma Consulting Group provides three strategic suggestions for online lenders: 1) strengthen front end detection and prevention 2) use data analytics to learn from synthetic accounts and 3) enrich reporting and information sharing. Source
BondMason has increased its minimum investment for new investors from GBP1,000 ($1,278) to GBP5,000 ($6,392) and will institute the change for existing clients beginning on July 31; a new tiered fee structure will also be introduced beginning on May 31 for all investors; according to BondMason's CEO Stephen Findlay, "This structure puts us in line with other investment services and is to reflect our commitment to client services, which was sadly proving uneconomic for clients with smaller balances."; BondMason's service allows UK investors to invest in multiple marketplace loans through a single account. Source
FundingSecure has received its HMRC approval and launched its IFISA; FundingSecure offers secured loans and markets annual returns of 12% to 16%; investors can invest up to GBP20,000 ($25,569) in the IFISA in 2017 according to UK regulations. Source
President Donald Trump is expected to ease regulatory burdens across the financial services industry; some marketplace lenders believe this could help to cause less friction; “We want to deliver a frictionless experience but there’s all this friction—hopefully this administration will be helpful,” said Marlette Funding CEO and Founder Jeffrey Meiler on a panel at LendIt USA 2017; the current market environment includes expectations for rising rates and less regulation which seems to be helping the outlook for a growing marketplace lending industry with opportunities across a range of categories including mortgage lending and business lending. Source
SoFi has developed a new marketplace lending fund primarily targeting family offices; a regulatory filing shows the fund as SoFi Prime Income Fund with 33 investors each investing a minimum of $500,000; total fund investment is $105 million; the Fund will focus on investing in SoFi's unsecured student and personal loans. Source
Pi Capital International LLC has advised Money360 on a $250 million structured debt facility; the funding comes from a financial institution in South Korea; Pi Capital was able to facilitate the transaction through its global alternative capital network. Source
Online franchise business lender ApplePie Capital has announced the acquisition of Funding Solutions, LLC and the appointment of Ronald Feldman as chief development officer; Funding Solutions is a six-person franchise loan consulting firm based in Michigan and will help business and product development for the firm; supporting ApplePie Capital's brand portfolio and product strategy, Ronald Feldman will also bring significant franchise market experience from roles at FranData, Franchise America Finance and The Siegel Financial Group. Source
Orchard has updated its US Consumer Online Loan Index; constituents providing data for the Index have increased to five; new methodologies pertaining to estimates and delinquencies have also been incorporated to improve the Index’s reporting; the updates increase the credibility of the Index as a performance benchmark for the marketplace lending industry; Bill Ullman, Orchard’s chief commercial officer, provides some additional details on the Index’s updates and an analysis of its performance in a blog post. Source
The creation of a secondary market for marketplace lending loans has been a hot topic recently; if a robust secondary market existed many believe more pension plans, registered mutual funds and other institutional investors would participate because loans would have a price and there would be liquidity for investors; currently marketplace lending loans trade on an over the counter market where many of the panelists currently participate; the panel explores whether whole loans are securities, why that matters and dives deep into the key aspects of a secondary market: price discovery, connecting buyers and sellers and fulfillment. Source