LendKey, an online lending platform that connects local banks to borrowers, announced it has received a “conditional” commitment of up to $1 billion for student loan consolidation originated on the LendKey site. The financing was from MidCap Financial, managed by a subsidiary of Apollo Global Management. LendKey stated, “this marks the largest ever institutional financing commitment to an online lending platform for student loan refinancing”.
“This transaction is a transformational event for the online lending industry,” said Vince Passione, Chief Executive Officer, LendKey. “Apollo is one of the world’s leading alternative investment managers and MidCap, along with the investment funds Apollo manages, are an ideal finance provider for LendKey. This commitment serves as a testament to LendKey’s success in building a valuable student loan portfolio for our current customers and a validation of the ability of online lending platforms to directly originate high quality loans.”
The jump in student debt and growing opportunities revealed by other direct lending platforms has propelled LendKey’s quest to offer a competitive service to loan holders by allowing users to compare loans from different lenders and apply for loans using LendKey’s digital loan application. LendKey wants to “transform” the $3.2 trillion consumer lending market.
“We believe the financing commitment from MidCap will provide a much needed set of expanded opportunities for lenders and borrowers across the fast-growing student loan market,” said James Zelter, Managing Partner and Chief Investment Officer of Apollo Credit. “As credit unions and other financial institutions navigate the changing interest rate environment and contemplate potential Risk Based Capital (RBC) measurements, we believe LendKey is uniquely positioned to provide its clients with a facility to sell student consolidation loans and, in the future, other consumer loans. In addition, we believe this commitment is a great example of the inherent strength of Apollo’s relationship with MidCap and our ability to source loans in a variety of attractive industries including student lending.”