SoFi Strikes Deal With Fortress for $2 Billion of Personal Loans
(Bloomberg) -- SoFi Technologies Inc. reached a deal to use $2 billion of Fortress Investment Group LLC funds for the origination of personal loans.
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The online bank, which aims to be a one-stop shop for financial services after starting out in student-loan refinancing, said the agreement will expand its loan platform business of brokering deals for pre-qualified borrowers and originating loans on the behalf of third-parties.
“SoFi’s loan platform business is an important part of our strategy to serve the financial needs of more members and diversify toward less capital-intensive and more fee-based sources of revenue,” SoFi Chief Executive Officer Anthony Noto said in a statement Monday.
SoFi shares climbed 7% at 8:46 a.m. in early New York trading.
It’s not unusual for financial-technology companies to turn to private-credit lenders to buy and fund consumer loans. Fintech lender Upstart Holdings Inc. has turned to Blue Owl Capital Inc., Castlelake LP and Centerbridge Partners, for example. Such agreements can also be attractive for banks, who may not want to hold capital-intensive consumer loans on their balance sheets.
Fortress, for its part, struck a similar deal with Best Egg earlier this month to finance the fintech’s personal loans.
--With assistance from Carmen Arroyo.
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