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United States Digital Lending Market Report 2021: Growth, Trends, COVID-19 Impacts, and Forecasts to 2026 - ResearchAndMarkets.com

·5 min read

DUBLIN, August 30, 2021--(BUSINESS WIRE)--The "United States Digital Lending Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.

The United States Digital Lending Market is expected to reach a CAGR of 11.4% during 2021 - 2026.

Owing to the COVID-19 pandemic, SMEs in the region are facing challenges to raise funds during the crisis to keep their businesses operating.

Digital Lending is expected to find several opportunities, especially amongst SMEs for growth and adoption. Further, during the COVID-19 pandemic, the government aims to support the people. In the United States, the Paycheck Protection Program (PPP) asks fintech lenders that qualify with specified requirements to underwrite loans and has deployed USD 511-billion to date.

With the increasing on-demand services and faster decisions, digital lending platforms are changing the face of commercial lending. However, digital approaches differ as banks transform their operations to keep up with online industry peers.

While digital disrupters have been busy spending the time to ease single loan applications, conventional banks could be missing a trick by digitizing only the standard areas of their commercial lending business.

United States is one of the largest and most advanced markets for digital lending, globally, due to its early adoption of digitization in various sectors. Also, factors such as the strong economy, robust presence of prominent solution providers, coupled with strong investment by government and private organizations for the development and growth of research & development activities, are poised to drive the demand for digital lending in the region.

Funding is a crucial element of the digital lending business model. There are three major funding models used by digital lenders who are Marketplace lenders, Balance sheet lenders, and bank channel lenders. Several digital lenders have been tapping multiple funding models as they grow.

Further, banking institutions retain certain fundamental competitive advantages. Arguably the most important is their access to insured deposits, which affords them low-cost capital. Regulatory concerns have likely caused banks to hesitate when adopting new technologies, but banks are increasingly looking for points of entry to the fintech space. It is expected that many banks will opt to partner with existing fintech companies to have their cost advantages with the fintech technological capabilities.

By combining their technological expertise with banks' lower cost of capital, these partnerships could enable banks to provide more efficient customer experiences at lower rates, as well as open them up to previously untapped customer segments.

Also, in the United States, platforms engaging in credit origination can be subjected to licensing requirements in each state where they get operated. For this reason, many platforms partner with the banks to originate loans agreed online.

Consumer Digital Lending is Expected to Grow Significantly

  • Bank channel-based lending drew particular attention, especially with the IPO of consumer loan-focused GreenSky Inc. The company has secured more than USD 11 billion in bank commitments. Small business-focused lender OnDeck announced an expansion of its OnDeck-as-a-Service platform through which it licenses its technology to banks. The company added PNC Bank as a customer and launched a new subsidiary, ODX, to handle future bank channel-based business. Avant launched a bank partnership platform for personal lending called Amount.

  • In order to keep growing, digital lenders are taking advantage of opportunities to expand the scope of their activities, both in terms of funding and product offerings. For example, SoFi, which began as a student loan refinancing company, now offers personal loans and mortgages. Personal loan-focused LendingClub also offers a business loan product. While some of the companies, such as Square and PayPal, entered digital lending from adjacent fintech segments, and some lenders are moving in the other direction by offering nonlending services. SoFi has been the most aggressive on this front, offering wealth management services and accepting applicants for its high-yield deposit account product, SoFi Money.

  • Student-focused lenders remain the most diversified platforms in the digital lending sector as Student loan startups are witnessing new investment and new customers as the region faces a continued student loan debt crisis. The Federal Reserve estimates USD 1.7 trillion in U.S. student loan debt. Students, on average, graduate with USD 29,000 of private and federal loan debt and default on their loans at a rate of 15%.

  • Product offerings in this segment include student loan refinance, direct student loans, personal loans, and even wealth management and mortgage products.

Competitive Landscape

United States Digital Lending market is observing an increase in number of investments and M&A activities by various global enterprises to gain access in the market. Vendors are increasingly spending on gaining consumer base by offering numerous benefits.

In addition, such investments are a strong part of their competitive strategy. Access to the distribution channel, already present business relations, and better supply chain knowledge, along with the self-owned platform, give the established tech giants entering into the market advantage over the new competitors.

Key Topics Covered:





4.1 Market Overview

4.2 Industry Stakeholder Analysis

4.3 Digital Lending and Regulatory Environment (including fintech laws in the US)

4.4 Porter's Five Forces Analysis

4.5 Market Drivers

4.6 Market Challenges

4.7 Impact of COVID-19 on the Digital Lending and Allied Markets


5.1 By Type

5.1.1 Business Digital Lending

5.1.2 Consumer Digital Lending


6.1 Company Profiles

6.1.1 BizfiLLC

6.1.2 On Deck Capital Inc.

6.1.3 Prosper Marketplace Inc.

6.1.4 LendingClubCorp.

6.1.5 Social Finance Inc. (SoFi)

6.1.6 Upstart Network Inc.

6.1.7 Kiva Microfunds

6.1.8 Kabbage Inc.

6.1.9 CAN Capital Inc.

6.1.10 LendingtreeInc.

6.1.11 Provident Bank (Provident Financial Services Inc.)


For more information about this report visit https://www.researchandmarkets.com/r/ptqbk8

View source version on businesswire.com: https://www.businesswire.com/news/home/20210830005427/en/


Laura Wood, Senior Press Manager
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