Online lending platform files de novo bank charter request

Avant, a major player in the 'near-prime' lending space, is moving to become a full-service national bank. For retailers and service providers who offer financing, this is a significant shift. Currently, most fintech lenders rely on partner banks to fund their loans. By obtaining a de novo bank charter, Avant will be able to take deposits and lend its own capital directly. This move is designed to lower their cost of funds and provide more stability in their lending products. For your business, this could mean more consistent approval rates and more competitive terms for your customers who don't have perfect credit. Fintechs that become banks are less vulnerable to the market shifts that sometimes cause third-party lenders to suddenly tighten their credit boxes. Avant’s transition signals a maturing of the digital lending market. It shows that 'near-prime' financing—often used for mid-to-high ticket purchases like home repairs or automotive work—is becoming a permanent, regulated fixture of the banking landscape. While the charter process is long, a successful bid by Avant would likely lead to more robust, long-term financing options for your customer base.

Source: American Banker — Top News

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