CircleBack Lending and Jefferies Agree To $500 Million Consumer Loan Sale Program

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CircleBack Lending, Inc. readies for major expansion with premier investment bank deal.

“These transactions through Jefferies will allow us to provide our loans to a much wider segment of the U.S. population, which remains in need of responsible alternatives to traditional bank loans and credit cards,

CircleBack Lending, Inc. (https://www.circlebacklending.com) has entered an agreement to facilitate the sale and securitization of up to $500 million aggregate principal amount of consumer loans. “These transactions through Jefferies will allow us to provide our loans to a much wider segment of the U.S. population, which remains in need of responsible alternatives to traditional bank loans and credit cards,” said CircleBack Co-Founder and CEO, Michael Solomon. “It is also a strong vote of confidence in our company that one of the premier investment banks in the world has chosen us as a source of prime consumer credit assets.”

Since its launch in 2013, CircleBack has originated over $4 million in loans to high-quality borrowers for purposes including debt consolidation, home improvement, and small business. These fixed-rate installment loans range in size from $3,000 to $35,000, and are only made to consumers at the higher end of the credit risk spectrum. A borrower needs a FICO score of at least 660 to qualify, and must also pass a thorough interview and verification process conducted by a CircleBack loan analyst. “We are taking a rigorous approach to credit underwriting and want to make sure we know our customers before issuing any loans,” said Solomon.

This deal is the latest in a series of large steps forward for the burgeoning “marketplace lending” industry, which got started in 2005-2006 when companies like Lending Club and Prosper launched the first Internet-based “peer-to-peer (P2P) loan” platforms. The industry has evolved rapidly over the past eight years, to the point where billions of dollars per year of loans are now being issued and purchased by institutional investors across multiple lending platforms that source and originate a diverse array of credit assets, from real estate and small business to unsecured consumer.

Despite the strong increase in marketplace and peer-to-peer lending activity to date, there is plenty of room to grow—the industry’s loan volumes remain small in comparison to the over $11 trillion U.S. consumer credit market. The next phase of expansion for CircleBack and other lenders will depend in part on the development of a robust securitization market for the loans they originate. To that end, Jefferies aims to leverage its expertise in the securitization market to structure securities backed by CircleBack-generated assets that can be rated by agencies like S&P and Fitch, and then be sold to a wide array of fixed income investors, including insurance companies, asset managers, endowments, and even the banks that marketplace lending platforms are competing with for borrowers.

About CircleBack Lending, Inc. (https://www.circlebacklending.com)

CircleBack Lending is an Internet-based finance company that provides prime consumers in the United States with a fast and efficient way to borrow money at attractive interest rates. CircleBack also offers institutional investors a robust, transparent platform to invest in consumer loans.

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James Gormley
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