New York based online lender for millennials, Pave, just secured $300m in debt and equity from New York hedge fund Seer Capital, along with existing investors. This online lender wants to help those with little credit history receive a loan easily, but they must have a commitment to education (i.e., taking a developing course at General Assembly). Some say the Federal Reserve's nudge of core rates could effect the cost of funding for these online lenders in 2016, but for now these platforms seem to continue flourishing as banks continue to reject low FICO borrowers.
Mr. Bass said he wasn’t too concerned about rising return hurdles from investors like Seer, because his borrowers would typically be people who are paying higher rates. “Further down the credit curve, you have a huge opportunity,” he said. “Loans can have rates north of 10% but are still much better than credit cards or that of competitors” who don’t focus on thin files. “We are out of the beta stage, and now we’re ready for expansion,” he said.