One of the country's largest online lenders is cutting jobs and shelving expansion plans in response to investors' rapid retreat from the beleaguered sector.
Avant, which specializes in loans to consumers with subprime credit scores, said Friday that it is laying off nearly 60 employees. The Chicago-based firm also said that it is delaying
"Yesterday we made the difficult decision to eliminate a small number of positions across our organization," the company said in an emailed statement. "We made this move to align our resources with a narrowed focus on our core personal loan product."
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Following the scandal-tinged departure of CEO Renaud Laplanche, the company is contemplating drastic steps to restore the confidence of loan buyers. Scenarios that would have been far-fetched a short time ago such as diluting shareholders and funding loans off its own balance sheet are now under consideration.
May 17 -
Prosper Marketplace's decision to eliminate 22% of its workforce is more evidence that the bloom is off the rose for a sector that had been enjoying astronomical growth.
May 4 -
Chicago-based Avant said Monday that it has started offering to refinance car owners loans. The firm also plans to begin financing purchases of new and used vehicles later in 2016.
March 21
The belt-tightening at the privately held Avant is the latest bad news for a sector that has been recently beset by funding troubles.
Last week, Lending Club
Avant experienced a 27% drop in loan volume during the first three months of 2016, the Wall Street Journal reported last month.
"We saw the capital markets really change in the beginning of the year, and we were the first lender to take appropriate action," Avant CEO Al Goldstein told Crain's Chicago Business, which first reported the layoffs. "We saw what happened to the other lenders who didn't."
Since its founding in late 2012, Avant has originated more than $3 billion in loans in the U.S., Canada and the United Kingdom.
