CircleBack Lending
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
CircleBack Lending was a Boca Raton, Florida online lender founded in 2012. It ran a marketplace connecting prime consumer borrowers with institutional investors, offering unsecured personal loans from $3,000 to $35,000, and raised $12 million to scale the platform.
02 / CircleBack Lending FAILURE REASONS
Failure reasons
CircleBack Lending failed because its credit model could not survive borrower defaults. The platform originated only about $4 million in loans in 2014, yet institutional money piled in on the promise of scale, including a Jefferies agreement to securitize up to $500 million of loans. When defaults ran far above expectations, with cumulative 2015 loan losses near 13.5%, funding vaporized. Exposed in 2016 as having quietly stopped originating loans, it shut down later that year.
03 / EVENT HISTORY
Events in the structured record
- Company founded
CircleBack Lending is founded in Boca Raton, Florida as an online peer-to-peer consumer lending marketplace.
- Peak funding round
The company originates only about $4 million in loans, yet Jefferies Group agrees to securitize up to $500 million of its loans.
- Operations ended
Bloomberg reports the company has stopped making loans as borrower defaults mount and funding dries up; CircleBack shuts down later in 2016.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Credit model assumed prime borrowers; defaults ran far above expectations
- 02
Only $4M originated while a $500M securitization deal promised scale
- 03
2015 loan losses near 13.5%; funding vaporized
- 04
Quietly stopped lending; shut down in late 2016