After picking up a $500 millon credit facility last year to fund more nontraditional consumer loans, fintech startup LendingPoint kicked off 2018 by acquiring point of sale finance platform LoanHero. LendingPoint uses a technology-based data algorithm to look deeper into a potential customer’s credit profile, usually “Subprime” borrowers with a score below 700, to provide their loan options in under seven seconds.
“We’re thrilled to welcome the LoanHero team. Offering credit at point of need solves a real consumer pain point and helps merchants grow their businesses,” says Tom Burnside, LendingPoint’s co-founder and CEO.
LoanHero offers on-site lending options, for example at the doctor’s office, to help the customer get finance payment options and the merchant obtain and retain sales over time. Merchants in medical, dental, home improvement, and other industries currently use LoanHero.
“LoanHero had a great merchant platform and origination program primarily focused on prime customers (those with credit scores above 700), but they didn’t have expertise in serving those in the 580-700,” says Burnside.
“When they were exploring potential partnerships in this area, LendingPoint made the most sense. LoanHero works with merchants to convert more transactions; with this acquisition, LendingPoint can move into more of a full suite of enterprise payments and financing.”
The LoanHero team will remain in San Diego, CA as they work together to integrate the platform and features into LendingPoint technology and its backend, with LoanHero CEO Zalman Vitenson leading the team. “The combination of the two companies doubles our origination channels and current customer base and triples the number of consumers we can serve,” says Burnside.
“We join one of the best teams in the industry, with unparalleled knowledge in risk management, credit and underwriting across consumer and merchant finance,” said Vitenson in a statement.
As they look forward to the next year, Burnside hopes to continue to reduce payment friction for merchants and service providers by allowing customers to pay in installments, with promotional financing, or personal loans.
“Our focus is always on making credit available to worthy but underserved borrowers, while running a business with stability, profitability and longevity. We will roll out products that help merchants and consumers achieve their financial goals responsibly,” says Burnside.
“This makes us a much more comprehensive consumer and merchant financing platform.”