On March 12 of this year, LendKey surpassed $2 billion in loan originations. This is a huge milestone for the company, which was founded a short nine years ago.
In light of this achievement, let’s take a closer look at what spurred LendKey to build its platform, how it works, and what CEO Vince Passione has to say about the future of the company.
How did LendKey get to where it is today?
The company was founded in 2009 after the Great Recession. It was a difficult time for banks and credit unions as they were facing an increase in regulatory scrutiny along with high capital requirements.
Further, new fintech companies were focused on disrupting the industry. Many brick-and-mortar companies wanted to compete, but navigating the online lending space was a new and expensive venture that wasn’t feasible.
LendKey understood the high barriers to entry and invested $30 million into a platform that was designed to help banks and credit unions break into digital lending. The company was clearly onto something like this recent $2 billion milestone shows.
LendKey has proven its business model by successfully giving lenders the solution they need to expand their loan portfolios in an efficient, secure, and seamless digital experience.
How does LendKey work?
LendKey offers a turnkey solution through its lending-as-a-service cloud-based platform.
LendKey continues to see record loan origination growth on behalf of our lending clients, and our latest round of funding is a testament to the dedication to our mission: Improving lives with lending made simple. LendKey has used this round of financing to enable more banks and credit unions to adapt to the digital age of lending quickly and cost efficiently.”
Currently, over 280 lenders are using LendKey’s turnkey solution, and over 68,000 consumers have borrowed from a LendKey lending partner.
What are the key features of the platform?
- Low costs: Efficient origination processing helps keep interest rates low for customers and members.
- Origination process: A digital loan origination infrastructure takes care of ID verification, electronic signatures, account verification, and automatic funds disbursement.
- Risk management: Each lender can customize the credit criteria and program guidelines to manage risk and enable instant decisions.
- Liquidity management: Lenders can manage their liquidity as they see fit, whether that means they are retaining loans on a balance sheet, selling whole or fractional loans in real-time, or buying loan participations.
- Demand generation: Digital marketing support and tools (website, print lab, etc.) are available to help companies generate leads.
- Continuous optimization: Customer data and analytics are provided to improve the program’s performance.
- Loan servicing: Servicing of the loan portfolios is provided through digital invoicing, payment processing, customer service, and real-time reporting.
- Security: All web-based application processes are protected with industry-standard SSL encryption.
In summary, LendKey’s solution enables lenders to quickly and affordably expand their portfolios with quality loans in new asset classes.
It does all the hard work, removing the need for lenders to invest in loan origination systems, infrastructure systems, and employees (to manage the lending program and execute on processing).
The applications are then matched up with local, not-for-profit community lenders. The application does not hurt the applicant’s credit score, and there are no application fees.
What’s next for LendKey?
The consumer lending market is only set to grow and further gravitate toward online services.
As per the U.S. Banking Digital Transformation Spending Forecast, the amount of money that retail banks in the U.S. will spend to create and implement digital transformation initiatives will increase at an average compound annual growth rate (CAGR) of 22.5% into 2020.
In the coming years, you can count on LendKey to continue to streamline the process of digital lending for banks and credit unions.
LendKey CEO and founder, Vince Passione, says, “LendKey continues to see record loan origination growth on behalf of our lending clients, and our latest round of funding is a testament to the dedication to our mission: Improving lives with lending made simple.
LendKey has used this round of financing to enable more banks and credit unions to adapt to the digital age of lending quickly and cost efficiently.”
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.