CommonBond

CommonBond
Private
Industry Financial Services
Founded November 2011 (2011-11)
Headquarters New York, New York
Key people
 David Klein (CEO)
Morgan Edwards (CFO)
Robb Granado (COO)
Vinayak Gurjar (Chief Risk Officer)
Phil DeGisi (Chief Marketing Officer)
Products Student loans
Website commonbond.co

CommonBond is a marketplace lender that lowers the cost of student loans for borrowers and provides financial returns to investors. The company refinances graduate and undergraduate student loans for graduates of over 2,000 universities, saving the average borrower over $14,000 over the life of the loan.[1] CommonBond also provides in-school loans to current MBA students at 20 programs in the United States. The company, which launched nationally in September 2013, is on track to fund or refinance more than $500 million in student loans by the end of 2015.[2]

Company background and overview

CommonBond was founded in November 2012 by David Klein, Michael Taormina, and Jessup Shean, who met at the University of Pennsylvania's Wharton School MBA program.[3] The impetus for initiating the company was the founders' frustration with the lack of affordable loan options to fund their own graduate school education.[3]

For their business proposal, the trio was accepted to the highly selective Wharton Venture Initiation Program, which serves as a start-up incubator.[4] After deciding to pilot their model at Wharton, the group focused on fundraising during the summer of 2012. By the company's launch in November 2012, CommonBond had raised $3.5 million; $2.5 million had been invested by Wharton alumni and another $1 million of seed funding was provided by a Wharton alumnus in return for a stake in the company.[3] CommonBond's first fund lent to 40 MBA students and recent graduates at Wharton.

CommonBond expanded to 20 MBA programs across the country in September 2013, after announcing it had raised over $100 million in equity and debt financing from investors including Tribeca Venture Partners and The Social+Capital Partnership, as well as industry veterans Vikram Pandit (former CEO of Citigroup), Thomas Glocer (former CEO of Thomson Reuters), and Tom Kalaris (former Vice Chairman of Barclays).[5][6][7][8] In March 2014, CommonBond expanded its student loan refinancing and consolidation programs to graduates of law, medical, and engineering programs across the U.S., in addition to MBA programs.[9][10]

In February 2015, CommonBond expanded its student loan refinancing program to a total of 14 graduate degree programs including MBAs, JDs, MDs, Engineers, Optometrists, Masters of Finance, Masters of Real Estate, Masters of Accounting, Physician Assistants, Veterinarians, Dentists, Healthcare Administrators, Masters of Public Policy, Pharmacists, and Nurses (Advanced Practice degrees[11]). At that time, the company also announced a financing partnership with Nelnet (NYSE: NNI). Nelnet committed $150 million to fund CommonBond loan volume and also made an equity investment in the company. This partnership marked the first time a public financial services company had invested in a student loan marketplace.[12]

CommonBond completed its first securitization of student loans in June 2015. With an investment-grade rating from Moody's of 'Baa2' and DBRS of 'A (high),' the company securitized approximately $100 million of student loan assets. The transaction marked the first time Moody’s has issued an investment-grade rating for a first-time-issuing marketplace lending platform.[2]

In July 2015, the company announced the hiring of 25-year finance industry veteran Morgan Edwards as CFO.[13]

In September 2015, CommonBond raised $35 million in Series B funding from August Capital, Nyca Partners, and Victory Park Capital, in a round led by August Capital.[14] Shortly thereafter, the company announced the expansion of its student loan refinancing program to graduates of over 2,000 universities at the graduate and undergraduate levels, as well as the introduction of its Parent PLUS Loan refinancing program.[1]

Products and services

For student loan refinancing, CommonBond offers nine fixed and variable interest rate products, with terms of 5, 10, 15, or 20 years. Interest rates start at 1.94% APR with autopay for variable rate loans, and at 3.74% APR with autopay for fixed rate loans. CommonBond also offers a student loan industry-first option called the "Hybrid Loan," a 10-year product that "carries a fixed rate initially and a variable rate after a set period of time."[15][16]

In September 2015, CommonBond introduced a new Parent PLUS loan refinancing program, whereby parents who borrowed federal Parent PLUS loans to finance their children’s undergraduate education can refinance those loans through CommonBond.[1]

For in-school MBA loans, CommonBond offers a 10-year fixed-rate loan at 5.78% APR and a 15-year fixed-rate loan at 6.09% APR.

To expand MBA student loan options for international students pursuing U.S. business education, CommonBond announced a partnership with Prodigy Finance, an international post-graduate student lender, in July 2015. The partnership allows international post-graduate students who come to CommonBond seeking student loan options to secure funding for their business school education in the U.S. through Prodigy Finance, which determines the terms and conditions of the student loans.[17]

According to CommonBond, students and graduates using its platform can benefit from more savings over the course of their loan repayments when compared to traditional funding sources, both public and private.[18] Alongside the financial savings to borrowers, the CommonBond value proposition includes high-touch customer service as well as a community of students, grads, and alumni, which affords opportunities for networking, career development, and mentorship.[19] To assist borrowers who are between jobs, CommonBond offers a service that matches them with consulting opportunities to help them earn money until they find a full-time position.[20]

Social mission

CommonBond is the first company in finance with a "one-for-one" social model similar to that of Toms Shoes and Warby Parker. For every degree fully funded on the CommonBond platform, the company funds the education of a student in need abroad for a full year in partnership with Pencils of Promise.[21] On the local level, CommonBond has partnered with KIPP charter schools and the GLOW Foundation to fund financial literacy programming for under-served neighborhoods across the U.S.[3]

In 2014, the company introduced the CommonBond Social Impact Award to recognize the country's top MBA social entrepreneur. Christine Su, CEO of Summer Technologies, was announced as the winner in 2014.[22][23] The winner of the $10,000 2015 CommonBond Social Impact Award was Sindhura Sarikonda, an MBA student at Wharton and founder and CEO of anti-trafficking nonprofit Sanlaap North America.[24]

See also

References

  1. 1 2 3 Mulhere, Kaitlin (2015-09-23). "Why Now Might Be the Best Time to Refinance Your Student Loans". Money Magazine. Retrieved 2015-09-23.
  2. 1 2 Campbell, Dakin (2015-06-10). "Pandit-Backed CommonBond to Sell Student Loans to Wall Street". Bloomberg Business. Retrieved 2015-09-23.
  3. 1 2 3 4 "Graduate investors fund the next generation". Financial Times. 21 April 2013.
  4. ↑ "Another Low-Cost MBA Loan Option". Poets & Quants. 8 January 2013.
  5. ↑ "Lending Start-Up CommonBond Raises $100 Million, With Pandit as Investor". The New York Times. 4 September 2013.
  6. ↑ "Student Loans Are Broken: This Company Just Raised $100 Million To Fix Them". Forbes. 4 September 2013.
  7. ↑ "Wharton start-up CommonBond extends loans to 20 US MBA courses". Financial Times. 4 September 2013.
  8. ↑ "MBA Loans Seek to Shift the Culture of Borrowing". Bloomberg Television. 9 September 2013.
  9. ↑ "With Over $100M Raised, P2P Lending Platform CommonBond Expands To 100 Programs To Help Grad Students Reduce Debt". TechCrunch. 21 March 2014. Retrieved 24 March 2014.
  10. ↑ "CommonBond extends MBA loan scheme". Financial Times. 19 March 2014.
  11. ↑ "CommonBond Refinancing FAQs". commonbond.co. CommonBond. Retrieved 5 February 2015.
  12. ↑ Saitto, Serena (5 February 2015). "CommonBond Obtains $150 Million in Boom for Online Lenders". Bloomberg Business. Retrieved 5 February 2015.
  13. ↑ Haunss, Kristen (29 July 2015). "Macquarie's Edwards joins CommonBond as CFO". Reuters. Retrieved 29 July 2015.
  14. ↑ Henry, Zoe (8 September 2015). "CommonBond Gets $35 Million Funding, Wants to Cut Woes Behind Student Loan Refinancing". Inc Magazine. Retrieved 8 September 2015.
  15. ↑ "CommonBond Introduces Industry's First Hybrid Loan". http://www.prnewswire.com/. CommonBond. Retrieved 22 October 2014. External link in |website= (help)
  16. ↑ "CommonBond Refinance Rates and Terms". http://commonbond.co/. CommonBond. Retrieved 22 October 2014. External link in |website= (help)
  17. ↑ Bhattacharyya, Rica (2015-07-09). "CommonBond, Prodigy Finance ink pact to expand MBA loan options for foreign students in US". Economic Times. Retrieved 2015-09-23.
  18. ↑ "P2P Lending & Education: CommonBond Launches With $3.5M, Joining SoFi In Quest To Solve The Student Debt Crisis". TechCrunch. 1 December 2012.
  19. ↑ "CommonBond: The Warby Parker of Student Loans". The Harbus. 31 March 2013.
  20. ↑ Woodruff, Mandi (6 February 2015). "Student loan refinancing is a great idea — except when it's not". Yahoo! Finance. Retrieved 6 February 2015.
  21. ↑ Butler, Kaitlin. "CommonBond Expands 1-for-1 Social Promise With Pencils Of Promise Partnership". CommonBond.Co. Retrieved 4 December 2013.
  22. ↑ Schiller, Ben (5 August 2014). "Raising Sustainable, Grass-Fed Beef? There Is, Of Course, Even An App For That". Co.Exist. Retrieved 11 August 2014.
  23. ↑ Klein, David. "And the Winner of the CommonBond Social Impact Award Is…". CommonBond. Retrieved 11 August 2014.
  24. ↑ Allen, Nathan (11 August 2015). "Wharton MBA Wins Social Impact Award". Poets & Quants. Retrieved 11 August 2015.

External links

This article is issued from Wikipedia - version of the 11/18/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.