Money continues to flow towards the student lending side of marketplace lending.
LendKey, a white-label marketplace lender that partners with credit unions and community banks, has reached a deal to sell MidCap Financial up to $1 billion in student-consolidation loans. MidCap is a subsidiary of Apollo Global Management, an approximately $160 billion-asset management firm in 2014.
"We started talking to Apollo about a year ago," LendKey Chief Executive Vince Passione told American Banker this week. Passione, a technology and Internet-banking executive at Citigroup in the 1990s, said that his company can get local lenders up to speed on student refinance and loans within "weeks." Unlike most other marketplace lenders entering partnerships, LendKey primarily has credit unions among its approximately 305 clients.
LendKey has done loan origination and servicing since 2009, with a 50-50 mix of student-loan refinancings and loans for current tuition payment. It recently began offering white-labeled direct auto and home improvement loans.
Passione said his platform, like others, views itself as a way for lenders to lower their interest rates without a hit to their bottom lines and a way to diversify their loans through the secondary market. Where LendKey differs from many is that it does so while allowing its institutional partners to keep their brands front and center with customers.