CommonBond, a New York firm that makes student loans through an online platform, said Tuesday that it has raised more than $275 million in debt funding from Barclays and others.
The warehouse financing from London-based Barclays marks the latest effort by a megabank to cash in on the online lending boom. JPMorgan Chase, Credit Suisse, Citigroup, DeutscheBank, Morgan Stanley and Capital One Financial are also helping to fuel the sector’s rapid growth through debt financing.
CommonBond, which launched in late 2012, is following a strategy similar to that of Social Finance, a larger San Francisco-based firm known as SoFi. That blueprint involves refinancing the student loans of well-paid college graduates, and later cross-selling a broader suite of financial products to those same customers.
CommonBond currently refinances existing loans for both students and their parents, and it also offers new loans to business-school students. The firm plans to start offering personal loans in the first half of this year, Chief Executive David Klein said Monday.
The warehouse line from Barclays, Klein said, is part of a larger trend in which online lenders that once relied on hedge funds for relatively high-cost financing are now accessing cheaper capital from banks.
Macquarie Capital and other undisclosed firms also contributed to the financing round, CommonBond said in a press release.
CommonBond also announced Tuesday the hiring of Beth Starr as vice president and head of capital markets. Starr previously worked as a managing director at Jefferies and Lehman Brothers, according to the press release.