Online Lenders, Podcasts

LendingPoint’s Tom Burnside: ‘There’s room to grow — we’re early in our journey’

  • LendingPoint has grown its consumer lending business over 9200 percent in three years.
  • CEO Tom Burnside joins us to talk about growth and products.
close

Email a Friend

LendingPoint’s Tom Burnside: ‘There’s room to grow — we’re early in our journey’

On the heels of a closing of a $250 million credit facility, LendingPoint’s Tom Burnside joins us on the show today. The consumer lender has originated $1.4 billion in loans to individuals, targeting an underserved population of people with FICO scores in the range of 580-680.

Tom talks about the growth potential in servicing this population. We also discuss the firm’s point of sale loan product and how that’s expanded their reach and broadened the definition of LendingPoint’s target borrower.

SubscribeApple Podcasts I SoundCloud I Spotify I Google Podcasts
The following excerpts were edited for clarity.

The mission

LendingPoint is an unsecured consumer lender. We target customers deserving of credit but that are typically underserved. 80 percent of all consumers have never defaulted on a loan, yet only 50 percent of them would be able to get a loan from a bank.

We saw a huge opportunity assisting those customers in the 580-680 FICO range. That’s been our mission.

The genesis story

My background is taking technology and data and bringing them together to tell big stories. From my experience at First Data to running CAN Capital, I’ve used non-traditional data to lend to customers and businesses that couldn’t access credit from banks. Data and technology to understand credit and risk — that’s what we do.

In 2014, there was a lot of P2P lending, but the people getting approved were the people a traditional bank would approve. We saw that if we could give a voice to the underserved customer, we could do something unique and different. We started looking at up to 700 FICO — it’s half the population.

Building a fintech firm in Atlanta

Atlanta has been very friendly to us. I think there are a few of pieces to this. First, the tech and analytics is very important. We team up with a couple of the local colleges to make sure that we get the analytics talent we need. 80 percent of all processing comes through Atlanta, too. We’re a hotbed for that. Lastly, we chose to be on the outskirts of Atlanta because we were able to pull talent from the suburban areas for all the service aspects of the business. Atlanta is a very friendly city so we’re able to pull talent from other places looking for a good quality of life.

The marketing funnel

As a result of focusing on the 580-680 customer, our cost of funds was very high. There’s not much scale and leverage ratios need to be low. It was a great place for us to start and understand the market.

About a year ago, we were seeing a customer profile pop up that was looking for help at the point of sale. It started with fertility clinics. They were looking for a ticket of $25,000. We bought a POS platform. Now, as the predictability of our business has improved, our cost of funds has gone down. As a result, we can go all the way up to 850. This has been a journey for us.

Managing multiple products

Now, you can find us online, whether we solicit you or whether you go through one of the big aggregators. You can also find us at a point of sale when you have a need for a specific product. They’re different populations, too. At POS, it tends to be a Millennial who appreciates fixed terms and direct to consumer targets older customers with different needs. They’re also different amounts: Millennial transactions are typically $3,500 and baby boomers are at $15,000.

We service these populations differently. We have a group of people in the business who deal with POS customers — there’s also a merchant involved in the transaction. The merchant is trying to solve an issue with a customer standing in front of him — they need to speak to someone immediately. With DTC, that transaction generally takes 5.5 seconds with a firm offer. If they have any questions, they can chat with us or call a service center. So, absolutely, we service them differently with different groups. Even with collections, they’re different.

Scaling growth

On our direct to consumer business, we see about 400,000 to 450,000 applications a month. On point of sale, it’s growing very quickly. We think we can double the business from where we are today just by getting the right product in front of the right customer at the right time. POS can be another $100M per month in the next 2 years. We’ve been doubling the business year over year. We’ve grown very quickly — over 9200 percent in three years.

There is a lot of room here. When you look at the nearest competition — someone like a OneMain has a $17 billion balance sheet. We have a lot of opportunity in front of us.

0 comments on “LendingPoint’s Tom Burnside: ‘There’s room to grow — we’re early in our journey’”

The Green Finance Podcast

The Green Finance Podcast Ep. 10: Tangible steps banks can take to help their customers lower their carbon footprint

  • The majority of people want to know more about the environmental impact of how they spend their money and want their banks to help them take action and reduce their environmental impact.
  • I'm talking about this today with my guest Emma Kisby, UK & Europe CEO of Cogo - a company that provides carbon footprint management products.
Iulia Ciutina | September 30, 2022
Where Credit's Due Podcast

Where Credit’s Due Ep. 10: Getting capital without dilution or debt through recurring revenue financing, with Pipe and Anthemis

  • Today we're talking about another way of accessing capital: recurring revenue financing. If there's cash flow coming in, this recurring revenue is made into a tradable asset that can be sold to investors.
  • It's a dilution-free and debt-free form of financing, which we explore in detail with Michal Cieplinski, Chief Business Officer at Pipe, and Farhan Lalji, Investor at Anthemis.
Iulia Ciutina | September 28, 2022
Podcasts

Behind Amex’s use of Kabbage as ‘the heartbeat’ of its strategy to help SMBs with cash flow

  • Two years after American Express bought small business lender Kabbage, the products are integrated and growing.
  • Tearsheet sat down with Kabbage's head of marketing to get insight on where the growth is coming from and where the company is headed.
Zachary Miller | September 27, 2022
Payments, Power of Payments Podcast

Power of Payments Ep. 14: JPMorgan vs Stripe and Block, CFPB is coming for BNPL, and is LTO a viable BNPL alternative?

  • This week, we talk about JPMorgan’s acquisition of payments firms Renovite, and the CFPB’s recent report on BNPL firms, which suggests that regulation is coming for the sector.
  • We also discuss why lease-to-own, which is another type of installment payment option, has been gaining popularity in recent months.
Ismail Umar | September 23, 2022
Data, Podcasts, Sponsored

‘Earned wage access is the next evolution in improving day-to-day liquidity’: Argyle’s Matthew Gomes

  • Director of strategy at Argyle, Matt Gomes, joins us on the Tearsheet Podcast.
  • Listen in to our conversation about how payroll and employment data API platforms enable financial institutions to bring the next generation of financial products to consumers.
Argyle | September 22, 2022
More Articles