Bad news continues to hit the online lending sector. Chicago-based prime and near-prime online lender, Avant, announced this week its plan to lay off 60 people (7% of its workforce). Given the industry's uncertainty, the company is also delaying plans to expand into credit cards, refinanced car loans, and opening operations in Australia.
Avant focuses on lending up to $35,000 at a time in two to five years loans to consumers with low credit scores at interest rates of up to 36%. The company had grown quickly for the past few years, reaching $3.5 billion in total loan volume. But with less access to capital, business has slowed recently, and loan volume declined 27% in the first quarter from the fourth quarter, the first such quarter-to-quarter drop since Avant started in 2012.