WILMINGTON — Fortress Investment Group has committed to buying up to $500 million in past loans provided by Best Egg, giving investors renewed confidence in the Delaware fintech startup. It shows.
Best Egg processes approximately $7.5 billion in personal loans annually. The deal isn’t the Delaware-based company’s largest, but it helps fuel its efforts to expand lending to traditionally high-risk borrowers with poor FICO credit scores. score.
First branded Marlette Funding when it launched in 2014, Best Egg serves approximately 2.9 million customers and has lent out $30 billion in personal loans alone. One of the company’s hallmarks is its easy online application process, and it has since expanded into offering credit cards, vehicle equity loans, and flexible rental tools to people looking to improve their credit scores.
“Our core business is to make as many loans as possible to as many people as possible, and we aim to do that to the point where we can’t do it responsibly,” said Best Egg Chief Financial Officer Andrew Dellinger. ” he said. “We by no means expect this to be the only deal we do with Fortress. When you think about large investors, they want to invest in something long-term. And we’re doing our due diligence on this deal. As a result of their payment, they want to work with us to open their doors to more customers.”
Fortress Investment Group is a highly diversified global investment manager with a $48 billion asset portfolio. This represents 2,000 institutional customers and individual investors, and the company also recently signed a $2 billion deal with SoFi Technologies for its loan platform business.
For Dillinger, the company’s deal with Fortress shows that Best Egg’s suite of services is attracting the attention of major firms in the capital markets space.
“There is a spectrum of capital markets, with some long-term, highly integrated partnerships and others highly transactional. Institutional interest shows that they value what we do for our clients and the benefits we can generate as fund writers,” he said. .
Consumers are looking for ways to cut costs as inflation drives up prices, including grocery stores across the country that saw spending jump 22% from January 2020 to June 2024, and housing that saw rents rise. I’m looking for something. Or find new ways to pay for your car, mortgage, daily expenses, and more. Earlier this month, FICO, often the standard used by credit analysts, found that up to 35% of the population uses credit cards, while more people are behind on their mortgages and car loans. I discovered that.
But because FICO uses a variety of data to determine its score, including metrics such as payment history, current debt, and amount of new loans sought, Best Egg uses a proprietary underwriting model designed by in-house data scientists. Use it to give loans to people you trust. Credit that allows the economy to function and has the ability to be repaid.
“A lot of people are looking for loans and using their income and credit profile to secure a loan to pay off their credit card debt. It’s a great form of installment financing business as a three-year, five-year credit card compared to ,” Dellinger said.
Best Egg has grown over the past four years, adding hundreds of new employees, many within driving distance of its headquarters in Brandywine Hundred. Earlier this year, the company expanded its auto equity loan program, which offers cash-out refinance options for the value of the vehicle or for additional funds. The program is now accessible to 90% of people in the United States.
Dellinger said that although the program has been slow to launch, he expects more customers to take advantage of the vehicle equity loan program in 2025.
“Given the key assets that consumers have, this is how we can leverage them to provide the widest possible range of credit,” he said. “We believe this will expand our reach and customer service capabilities.”
