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LendUp is already profitable on a per loan business, and would be overall if it wasn't pouring so much capital into growth and engineering.
Because of several coincident factors: 1). the required funding is but a subset of the massive stimulus spending currently underway while the per-home equipment tab is about equal to the per loan budget under the MHAP; 2). a large number of distressed borrowers whose debt ratios would be mitigated enough by the solar economics to justify a refinancing that would ensure their solvency; 3).
The rate per loan has fallen to 6.05 pence from 6.25 pence following government spending cuts.
Damelin boasts that the company makes only £15 net profit per loan.
This year's rate per loan is 6.05 pence, down from last year's figure of 6.25 pence.
"It will be very difficult to sustain last year's rate per loan because of the cut in funding," he said.
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David Klein, the company's CEO and co-founder, told TechCrunch that the company is profitable on a per-loan basis and projects that it will be fully profitable as a business in 2018.
Through the use of technology and iterating a lot on our model, we've been able to get the per-loan cost to the borrower down to just 5%.
At the end of 2012 there were 19,000 credit union loans in Britain where the borrower was between three and 12 months late with their payments, giving a total arrears figure of £14.5m (an average of £765 per troubled loan).
In Denmark libraries used to pay around 17 Danish kroner ($3) per digital loan, but even with a price as high as that the country's largest publisher pulled out.
He estimated that each month's delay cost the banks $1,000 per home loan, so if there was a three-month delay on the roughly two million homes currently in foreclosure, that translated into a $6 billion hit.
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