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Fasanara Bi-Weekly Digest



LendingClub Updates and Troubling Apple

Today's Headlines Are:

  • The world’s leading CEOs are shunning banks – and this is why

  • LendingClub pursues National Bank Charter

  • LendingClub: Apple Card spells disaster for consumers

  • Bad times in Tech? Not if you’re a start-up serving other start-ups

  • Fox Corporation taps into fintech market for growth

  • GLI chief slams report of P2P divestment as “outrageous”.


The World’s Leading CEOs Are Shunning Banks – And This Is Why

There are plenty of reasons why CEOs are turning to marketplace lenders for alternative finance, including for traditional lending, construction loans and short-term debt.

P2P lenders can often deliver better turnaround times than the banks due to their sophisticated credit analytics – loan applications can be approved in days instead of weeks – and there’s less bureaucracy. These non-banks also offer products major banks don’t, such as short-term debt facilities for months or even weeks. They may also accept more unusual forms of security.

Loans originated from P2P lenders may also have better terms. For instance, in the UK, there are often no penalties from non-banks for early repayment of loans, whereas with many banks, customers incur a penalty if they repay a loan early. Additionally, many businesses that have previously borrowed from online lenders have an easier time obtaining finance when they go to a bank to apply for a loan. This is especially the case for businesses with a short trading history.

LendingClub Pursues National Bank Charter

Hot on the heels of OnDeck’s announcement that it intends on pursuing a bank charter, LendingClub’s CEO Scott Sanborn announced in an earnings call with investors on Tuesday that the P2P lending platform has also decided to pursue a national bank charter.

If LendingClub is able to receive a bank charter, it will be able to morph into a full-service digital bank – a hot sector of Fintech. But then going through the approval process can take years. Sanborn said on the call that obtaining a national bank charter is a “significant undertaking” and said the company will provide updates as things evolve.

LendingClub already has a well-established relationship with WebBank, a Utah-chartered industrial bank. LendingClub could therefore theoretically start providing additional bank-like services well before receiving a federal bank charter. Whether it uses WebBank, or someone else, the LendingClub Bank could be announced sooner rather than later.

LendingClub: Apple Card Spells Disaster for Consumers

Apple Card, a “new kind of credit card” launched by Apple in partnership with Goldman Sachs is expected to be made available to the public within the next few days.

Pitched as a more secure, feature-rich type of credit card, one that gives cashback daily on purchases, most observers expect the Apple Card to be a hit out of the gate. The affiliation with Apple, and its enormous installed user base and iPhone integration, virtually assures wide adoption of the Apple Card.

But not everyone is enthusiastic about Apple’s deeper push into Fintech. One detractor is online lending platform LendingClub. Crowdfund Insider recently spoke with Anuj Nayar, Financial Health Officer at LendingClub, and he told us why the Apple Card “spells disaster for consumers across the U.S.”

Bad Times in Tech? Not if You’re a Start-Up Serving Other Start-Ups

According to CB Insights and PwC, start-ups raised $55 billion in venture capital in the first half of this year, the most since 2000. And a burgeoning class of these companies is thriving by catering to a fast-growing market: other start-ups.

In the US, start-up Brex provides charge cards to other start-ups and is currently valued at $2.6 billion. Apart from Brex, there is Carta, which helps start-up employees manage their equity and is valued at $1.7 billion. There is Guideline, which provides retirement services to start-ups. And there is InterPrime, which helps start-ups manage their “idle cash” and has more than 50 customers.

Fox Corporation Taps into Fintech Market for Growth

Fox Corporation - the Rupert Murdoch-controlled US broadcaster - is pushing into the US fintech market with the $265m purchase of a majority stake in Credible Labs, a San Francisco-based consumer P2P lender.

Fox Corporation said on Monday that it had agreed to buy a 67 per cent stake in Credible Labs and has committed an extra $75m to expand the company. The deal marks Fox’s first move into marketplace lending and reflects its efforts to provide a wider range of services to its customers, following the $71bn sale of its entertainment assets to Disney.

Credible was founded in 2012 as a platform for refinancing student loans and has expanded to include real-time offers of personal loans, mortgages and credit cards from multiple vendors. In the six months through to June, it reported $19.7m in revenue, up from $8.8m in the same period a year earlier.

GLI Chief Slams Report of P2P Divestment as “Outrageous”

GLI Finance chief executive Andy Whelan has refuted a recent report in The Sunday Times that claimed the firm is looking to divest its P2P lending platform portfolio. The Sunday Times article, citing anonymous industry sources, said that the Aim-listed alternative finance group had offered to transfer some of its P2P holdings to rivals free of charge, in the wake of the Lendy collapse.

Whelan, however, told Peer2Peer Finance News that the report was “outrageous”, and confirmed that GLI Finance is not offloading its P2P portfolio. “[The Sunday Times article] is factually incorrect and poor journalism,” Whelan said. “We are not doing what they suggested. It creates unnecessary worry among shareholders. And to link all P2P companies with Lendy is just outrageous.”


Thank you for the attention!


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