Weekly Online Lending Snapshot – December 16, 2016
On December 14th, the Federal Open Market Committee (FOMC) announced the results of its November meeting, a well-telegraphed rate hike setting the federal funds rate range to between 0.50 and 0.75 percent. They also set expectations for additional hikes in 2017. Many banks were quick to announce an increase in their prime lending rates, and while we expect that some online lenders will follow suit, as of this writing we have not seen similar announcements. Earlier this week, ApplePie Capital entered into a $180 million loan purchase agreement with TowerBrook Capital Partners L.P. and closed a $16.5 million Series B round led by QED Investors and Fifth Third Capital. This follows a series of deals announced throughout the month, including a new $200 million revolving credit facility for OnDeck from Credit Suisse. While 2016 has been a turbulent year for some online lenders, we expect the acceleration in positive deals and increased interest from traditional lenders looking to participate in the space will continue into 2017.