E-Loan
| Company type | Subsidiary |
|---|---|
| Industry | Financial services |
| Founded | 1997 |
| Founder | Janina Pawlowski, Chris Larsen |
| Headquarters | Rosemont , United States |
Area served | United States |
Key people | Ignacio Alvarez (CEO), Richard Carrión (Executive Chairman) |
| Products | Personal loan referral services, mortgage lending (historical), deposit accounts (until 2017) |
Number of employees | 930 (2004) |
| Parent | Popular, Inc. |
| Website | www |
E-Loan, Inc. operates as a financial services firm that connects consumers with various lending partners. Established in 1997 by entrepreneurs Janina Pawlowski and Chris Larsen, E-Loan was among the first to offer lending solutions online, rapidly becoming the dominant platform during the late 1990s. By 1999, it held a commanding 25% portion of the online mortgage sector, surpassing competitors such as Quicken Loans.
Now functioning as a subsidiary of Popular, Inc., E-Loan specializes in personal loan referral services. In May 2017, its deposit account holders were transitioned to Popular Direct, signaling a strategic move away from direct loan issuance.
History
The company was founded by Pawlowski and Larsen, who previously worked together at a mortgage lender in California and launched one of the earliest internet-based lending platforms as online banking gained traction. Initially, E-Loan provided services including purchase and refinance mortgages, home equity loans, credit lines, and automobile financing.
Growth
E-Loan debuted its website www.eloan.com in mid-1997, offering a simplified online mortgage application experience. The firm raised $25.4 million in venture capital funding from investors such as Sequoia Capital, Yahoo Inc., and Softbank Holdings. In 1998, benefiting from a favorable interest rate environment that propelled mortgage originations to $1.5 billion, E-Loan secured a significant share of the burgeoning $4.2 billion online loan market.
Leadership roles include CEO Ignacio Alvarez and Executive Chairman Richard Carrión, who oversee E-Loan’s strategic direction within the Popular, Inc. corporate framework.
Yahoo Investment
By August 1998, E-Loan needed additional funding to maintain its expansion, spending approximately $250,000 monthly to support a workforce of 150 employees. The founders considered a $130 million buyout proposal from Intuit Corp., which would have provided Pawlowski and Larsen with $10 million each plus $16 million in Intuit stock. However, this acquisition would have resulted in E-Loan losing its operational independence under a board-controlled structure.
Instead, Pawlowski opted to sell a 23% stake in E-Loan to Yahoo for $25 million. While less financially rewarding upfront, this arrangement preserved company autonomy and established E-Loan as Yahoo’s preferred mortgage platform.
Recovery & Development
In 2002, E-Loan moved its headquarters to Pleasanton, California and launched the E-Loan Auto Fund One—a special purpose vehicle acquiring prime auto loans supported by a $540 million credit line from Merrill Lynch. Revenue was generated through discounted cash flows after interest expenses, servicing fees, and credit loss adjustments.
To improve efficiency and reduce origination costs, E-Loan incorporated proprietary fintech solutions alongside licensed technology from Sun Microsystems, Cisco Systems, and Oracle. These tools enhanced automated credit screening and underwriting capabilities, bolstering its competitiveness in mortgage lending.
In 2003, the company formed Escrow Closing Services, Inc., a fully owned subsidiary providing mortgage closing operations such as document preparation and funds disbursement. By 2004, E-Loan had originated over $5 billion in mortgages—mostly fixed-rate loans with approximately 70% structured as lines of credit—employed 930 personnel, held assets totaling $121 million alongside $86 million in stockholders’ equity, generated revenues of $135 million, and recorded net income of $822,000.
As of 2004 ownership details showed insiders holding 17%, including founder Christian Larsen with a 5.05% stake. Institutional investors controlled 38%, led by Second Curve Capital (7.77%), Wells Fargo & Co. (5.11%), American Century Investment Management (2.11%), Rice Hall James & Associates (1.82%), and Gruber & McBaine Capital Management (1.63%).
Banco Popular Acquisition
In August 2005, E-Loan was purchased by Banco Popular, a Puerto Rico-based financial institution, for $300 million. At that time, Popular Inc., the parent company of Banco Popular and the largest banking entity in Puerto Rico, held assets totaling $46 billion and operated more than 135 branches across the United States along with over 280 locations within Puerto Rico.
The acquisition was intended to boost E-Loan's financial capacity and lending volume by capitalizing on economies of scale to lower expenses and improve its market position.
In October 2008, Popular Inc. declared that E-Loan would discontinue its direct mortgage lending activities in 2009 but would maintain offerings such as certificates of deposit and savings accounts. The company's operational and administrative responsibilities were transferred to other subsidiaries within the Popular group. Additionally, E-Loan moved its corporate headquarters from Pleasanton, California to Rosemont, Illinois that same year.
Company representatives emphasized that current loan customers would be smoothly transitioned to another Popular subsidiary without any disruption.
Development After the Acquisition
By May 2017, the deposit products previously under E-Loan were rebranded as Popular Direct, with both brands managed by Banco Popular North America.
Awards
Since its founding, E-Loan has earned numerous accolades for privacy protection and user experience excellence:
- Financial Services Standard of Excellence Award from the Web Marketing Association (2013)
- Standard of Excellence Award at the New Media Awards (2013)
- Best In Class in Banking from the Interactive Media Awards (2013)
- Recognized as a Top Financial Company for Privacy by TRUSTe and the Ponemon Institute (2007)
- Ranked third in privacy by The Customer Respect Group in 2005, the highest position among financial service providers
- Highlighted by Computerworld as one of the Safest Places On the Web
External links
- Articles with short description
- American companies established in 1997
- Financial services companies established in 1997
- Mortgage lenders of the United States
- Financial services companies of the United States
- Companies based in Pleasanton, California
- Companies based in Cook County, Illinois
- Rosemont, Illinois
- 2005 mergers and acquisitions
- 5
- Companies of the United States by year of establishment