(San Diego, CA) – LoanHero, Inc., a disruptive consumer-lending platform, closes $1.7M in seed capital along with a $20M debt facility. The company, with headquarters in La Jolla, CA, and offices at San Diego’s premier tech incubator, EvoNexus, is changing the way borrowers, lenders, and merchants interact at point of sale with a lending platform capable of funding every type of borrower.
The seed round was led by a New York-based investment partnership focused on early stage FinTech start-ups and included multiple local and national angel investors. The debt facility will be used to finance consumers.
LoanHero delivered its first generation platform to merchants in April, to wide acclaim. The company is disrupting the lending paradigm at point-of-sale, a multibillion dollar market, by offering instant-decision software that is capable of financing borrowers of all credit types through one streamlined application process. LoanHero’s platform is accessible from any device, 100% paperless, and allows borrowers to see their financing options without affecting their credit.
After working with dozens of merchants and lenders, Derek Barclay and Kristin Slink started LoanHero in 2014 to deliver better loan products to consumers, while also solving pain points for businesses and lenders. LoanHero uses marketplace lending, its own balance sheet, and strategic lender partners to tackle a wide spectrum of consumer needs.
“Point-of-sale financing is fractured,” said Barclay, LoanHero’s President, “as merchants must use multiple incompatible financing programs, each designed for only one consumer segment, resulting in poor borrower experiences and inefficient use of merchant’s time. Merchants face complex options that don’t necessarily help their customers. LoanHero is passionate about simplifying retail finance.”
The LoanHero platform takes the guesswork out of applying for financing and provides borrowers with the best lending product, regardless of their credit. LoanHero partners with credit unions and marketplace lenders to provide prime borrowers with low, fixed interest rates. The company utilizes its balance sheet and strategic lending partners to approve near-prime and subprime borrowers who are often underbanked and underserved at the point-of-sale.
At the 2nd Annual Fintech Global Expo, Eric Thaller, Prosper Marketplace’s V.P. of Investor Services, predicted that “the top disruption by marketplace lending will be at the point of sale, blurring the line between lending and payment.” LoanHero often offers prime consumers interest rates lower than credit cards while also charging merchants lower transaction fees than the credit card networks. Furthermore, LoanHero has been able to offer financing to over 70% of applicants from furniture stores located in underbanked areas, far higher than prime-only lenders.
“As marketplace lending expands, the focus becomes borrower acquisition” according to Steve Connolly, LoanHero’s CEO, “which is the company’s strength. It has built a unique way to work with merchants and loan investors, bridging the gap between point-of-sale financing and marketplace lending, resulting in a win-win: investors gain access to new deal flow and merchants offer competitive loan products through a single seamless platform.”
LoanHero has developed an innovative loan origination platform that solves a multibillion-dollar problem. By bringing marketplace lending to the point of sale, LoanHero provides better financing options for consumers purchasing goods and services including furniture, home improvement, auto repair, and elective healthcare. Through the integration of strategic lending partners in combination with a unique balance sheet/marketplace lending structure, LoanHero is able to offer instant decisions and the most competitive loan product available for each level of credit through one streamlined platform. LoanHero empowers merchants and lenders alike to become Heroes to the consumers they serve.
To learn more about LoanHero and stay up to date on future updates, visit www.loanhero.com.