More than a third of North America's banking services are predicted to go digital by the end of this decade, and online lenders are at the forefront of this movement. They are taking advantage of today's low interest rates and the cost savings that come from operating without a physical presence. However, earning market share against traditional brick-and-mortar lenders isn't an easy thing to do - online lenders must ensure that their virtual environments offer the full set of services borrowers expect from old-guard lenders. Moreover, they must do so with an interface that is easy-to-use, completely secure and fully professional in appearance as well as functionality. The upside for those lenders who are up to the challenge - and the investors who support them along the way - is the potential to earn considerable market share in a $45 billion dollar industry. It may be difficult to identify those providers with the greatest likelihood to make the most of the ongoing shift to increased online commerce, but some standouts include industry pioneers like IEG Holdings Corp. (OTC Pink: IEGH) and recently launched providers like LendUp.
IEGH is of particular interest, because they offer borrowers and investors a combination of internet innovation and a well-established business model. The company comes to the American market having already earned a name for themselves as an international lender widely respected for their fast, fair and friendly loan practices. Here in the States, they provide unsecured consumer loans under the "Mr. Amazing Loans" brand to residents of Arizona, Florida, Illinois and Nevada. The company intends to apply for its license to operate in New Jersey before the end of the year, adding an additional 8.9 million potential customers, and then expects additional expansion to California, New York and Texas in 2014.
Importantly, the company recently announced that it received a new $10 million senior debt facility from its current lender, Boston Financial Group, earlier this month. This replaces a $3 million facility the company had in place since June 2012 and is a strong indication of the support the company's business model and growth strategy is generating within the financial services industry.
Perhaps an even greater indication of the success of that growth strategy is IEGH's total cumulative loan originations. The company reported that as of November 11, 2013, they stood at $437,000, an increase of 84% over the second quarter's total of $237,000. All signs currently point to the company having its biggest approval month ever this November.
Recognizing the rapidly changing online environment, the company is keenly aware that a static web presence will not generate the sustained, long-term growth their customers and stakeholders expect. That's why the company has devoted considerable resources to create a dynamic, contemporary experience that remains continually relevant to visitors and that leverages advanced technology for faster, more seamless and more secure transactions. Later this month, the company will be launching their new website, http://www.mramazingloans.com/, which will showcase much anticipated upgrades for an enhanced and more intuitive user experience.
The site is just part of a broader web strategy that is designed to maximize exposure for the company while minimizing costs. For example, IEGH has in place a number of processes to facilitate lead qualification, ensuring that customers are properly vetted prior to initiating costly and length paperwork processes. They have also invested considerable resources into search engine optimization, making them as visible as possible to consumers looking for loan providers through popular search engines like Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO) and Microsoft's Bing (NASDAQ: MSFT).
The company has also entered into successful joint ventures with three top online lead providers on a cost-per-loan-funded basis. These relationships are already proving successful, reducing customer acquisition costs from the 8% to 10% typically seen from traditional print and television advertising to as low as 1% on a $10,000 loan. These favorable customer acquisition costs combined with the low fixed overheads attributable to IEGH's online model are key competitive advantages over traditional lenders with multiple physical offices such as Springleaf Holdings (NYSE: LEAF) and OneMain Financial, a subsidiary of Citigroup (NYSE: C).
Investors will also value the fact that the company provides Level 2 access to its stock activity, something not often seen in this sector but greatly valued by those who are serious about making the most of their trading opportunities.
All of these efforts are aligned toward the company's goal of gaining market share by building awareness of online lending as a general category and by promoting their specific brand advantages.Considering just how rapidly almost all forms of economic activity are transitioning e-commerce, it's not surprising at all to expect that consumers will be gravitating towards those companies that offer them secure, reliable financial services wherever and whenever they happen to need them. IEGH is positioning itself to be such a company, with an established foundation, a dynamic presence and the potential to scale quickly as demand increases.
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ABOUT IEG Holdings (OTC Pink: IEGH)
IEG Holdings Corporation (OTC Pink: IEGH) provides unsecured consumer loans under the brand name "Mr. Amazing Loans" via its website www.mramazingloans.com. After lending approximately $48 million to over 11,500 borrowers in Australia, the Company Founder and CEO Paul Mathieson moved to the U.S. market in 2008 to replicate the successful business model. IEGH now operates online in the USA covering all of Nevada, Arizona, Illinois and Florida. IEGH plans to apply for a New Jersey license in November 2013 and expand to New York, Texas and California in 2014. The company launched advertising for its online loan origination platform in mid-2013, partnering with top lead generators in the United States. The company's loans range in value from $2,000 to $10,000 and have a term of three to five years with a 19.90% to 29.90% APR. Significant growth is expected from the online loan origination business, which has the potential to scale much more rapidly and at a higher net margin than the previous brick-and-mortar business. For more information visit http://www.investmentevolution.com/.
Disclosure
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