SoFi strikes deal with Fortress for $2 billion in personal loans

(Bloomberg) — SoFi Technologies Inc. has reached an agreement to use $2 billion in funds from Fortress Investment Group LLC to make personal loans.

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The online bank, which aims to be a one-stop shop for financial services after moving into student loan refinancing, said the deal will expand its lending platform business from brokering deals for pre-qualified borrowers and making loans on behalf of third parties . -parties.

“SoFi’s lending platform business is an important part of our strategy to meet the financial needs of more members and diversify into less capital-intensive and more fee-based revenue sources,” SoFi CEO Anthony Noto said in a statement Monday.

SoFi shares rose 7% at 8:46 a.m. in early trading in New York.

It is not uncommon for financial technology companies to turn to private lenders to purchase and finance consumer loans. Fintech lender Upstart Holdings Inc. for example, has turned to Blue Owl Capital Inc., Castlelake LP and Centerbridge Partners. Such agreements could also be attractive to banks, which may not want to hold capital-intensive consumer loans on their balance sheets.

Fortress struck a similar deal with Best Egg earlier this month to fund the fintech’s personal loans.

–With help from Carmen Arroyo.

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