Avant

Avant provides personal loans and credit cards to consumers via a web portal. The company focuses on providing loans to underserved segments of the market, which include customers with ‘fair’ or ‘bad’ credit scores who are typically not able to gain access to loans and other forms of credit from traditional financial institutions. Applications for loans are completed online to make the process more accessible and convenient to individuals. The company does not have its own banking license; instead, the company uses its credit products under the license of WebBank. It operates in the US, Canada, and the UK. 

The company expanded its offering to launch digital banking solutions in December 2021 which include Avant Banking’s offerings include spending accounts (with no minimum balance required), debit cards, and ACH transfers, under the banking license of Evolve Bank & Trust. Avant also allows users with direct deposits to access payday funds up to two days early, along with virtual cards that can be added to Apple Wallet or Google Pay. Avant does not charge fees for account maintenance or foreign transactions.

Avant requires a minimum annual income of USD 20,000 to gain approval for a loan. The company’s clientele largely comprises middle-class individuals with annual household incomes in the range of  USD 40,000-100,000. Loans approved by the company range between USD 2,000-35,000, with monthly repayment plans of 2-5 years. Given the high-risk nature of the company’s clientele, interest rates charged on loans tend to be on the higher side, with the lowest rate starting at 9.95% APR (Annual Percentage Rate). The company also provides credit cards with credit limits between USD 300 and USD 3,000.

The company also uses an in-house formula for calculating credit risk, which the company claims has been more useful than traditional credit scoring methods such as FICO credit scores which are based on a limited number of variables. The company’s formula uses machine learning algorithms and other big data techniques to gather additional data and analyzes about 10,000 variables to determine an individual’s credit score; it also claims that it can predict the likelihood of a customer defaulting on a loan with 57% better accuracy than FICO scores alone. 

In April 2021, the company acquired Zero Financial, a mobile banking developer, along with its Neobank operations (Level). The acquisition was intended to aid Avant in expanding its product portfolio to provide digital banking solutions to its customers.

Key customers and partnerships

As of December 2022, the company served over three million customers and had issued more than one million credit cards.

Funding and financials

Avant secured USD 250 million in corporate debt and redeemable preferred equity from Ares Management’s Alternative Credit funds in December 2022. It had planned to use the fresh funds to expand its credit portfolio and platform.

The company generated a total revenue of USD 265 million in 2020. As of December 2022, the company was reported to have provided around USD 9 billion worth of loans.