Boca Raton-based CircleBack Lending has partnered with Jefferies according to a company statement. The agreement is to facilitate the sale and securitization of up to $ 500 million of total principal amount of consumer loans. CircleBack was founded in 2013 and claims it has made more than $ 4 million in loans to “high-quality buyers” for debt consolidation, home improvement, and small businesses. These fixed rate installment loans range in size from $ 3,000 to $ 35,000 and are provided to consumers at the higher end of the credit risk spectrum. The company claims that 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.
“These transactions through Jefferies will allow us to extend our loans to a much larger segment of the American population, who continue to need 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 world’s leading investment banks has chosen us as a source of premium credit assets.”
“We are taking a rigorous approach to underwriting and we want to make sure we know our clients before we issue loans,” Solomon said.
The company drew a parallel with the growing peer lending space, exemplified by companies like Lending Club and Prosper. These two platforms are now facilitating billions of dollars in loans as consumer awareness and acceptance has grown. Lending Club has applied for its initial public offering, an offering that is anticipated to set the pace for the P2P industry.
The company stated that Jefferies aims to leverage its experience in the securitization market to structure asset-backed securities generated by CircleBack that can be rated by agencies such as S&P and Fitch, and then sold to a wide range of fixed income investors, including insurance companies. , asset managers, endowments, and even the banks with which the market’s lending platforms compete for borrowers.
CircleBack was founded by Michael Solomon and Todd Walters. Both are veterans of the early days of peer-to-peer lending. Both Walters and Solomon They were involved with Loanio, an unfortunate company that fell prey to the regulatory hurdles that challenged early P2P entrants.
CircleBack Lending Announced a round of equity financing for $ 1.9 million last January.