SoFi inks deal with Fortress for $2 billion in private loans

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

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

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

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

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 reached out to Blue Owl Capital Inc., Castlelake LP and Centerbridge Partners. Such arrangements may also be attractive to banks that may not want to hold capital-intensive consumer loans on their balance sheets.

Fortress, in turn, struck a similar deal with Best Egg earlier this month to finance the fintech's personal loans.

– With support from Carmen Arroyo.

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