SoFi expands loan business to ease concerns after short report
SoFi Technologies, Inc. (SOFI) announced on Thursday that it has secured over $3.6 billion in personal loan delivery across three new partnerships in an expansion of its Loan Platform Business (LPB).
According to SoFi, one LPB transaction is for a $1 billion loan delivery with a leading global bank and another is with a financial services and insurance group for $600 million over 12 months.
The fintech company said it has also agreed to terms with a top-five global asset management firm that is expected to deliver up to $2 billion over a two-year period.
“Adding three new partners to our growing network shows the unique value of our Loan Platform Business to asset managers, institutional investors and partners more broadly,” SoFi CEO Anthony Noto said in a statement.
“By connecting strong borrower demand with institutional capital, we’re building a capital-light, fee-based business that complements our overall lending business while leveraging our existing technology platform capabilities in underwriting, pricing, marketing and servicing.”
SoFi shares dropped more than 4% on Thursday, which could have been due to the broader selloff , as the war in Iran continues to put pressure on US stocks.
But the announcement of the expansion of its personal loan business could help quell concerns some investors might have had following a report last week by prominent short seller Muddy Waters that accused the company of "Eron-esque" accounting malpractice.
According to Muddy Waters, SoFi's personal loan business has a charge-off rate of about 6.1%, rather than the 2.89% it reports. It alleges that the company "manipulates the rate" by disposing of the loans before hitting the charge-off threshold and then "seemingly parking defaulted loans off balance sheet."
By doing this, Muddy Waters alleges that SoFi produced $259 million in unwarranted fair value gains on personal loans in 2025, which is about 25% of its reported adjusted EBITDA.
The short report also alleged that SoFi's student loan business "appears to exist primarily to generate Fair Value gains for management bonuses; not for strategic or economic reasons."
SoFi said the report shows "a fundamental lack of understanding of our financial statements and business" and has threatened to take legal action against Muddy Waters.
Mizuho analyst Dan Dolev rebutted the claims made by Muddy Waters in a client note earlier this week, arguing that while "the report has an impressive amount of detail an analysis," the firm believes "these arguments could likely be refuted using SOFI's public disclosures," noting that it is a "heavily regulated bank."
On Thursday, Dolev maintained an Outperform rating on SOFI shares, writing in a client note that the announcement of the new agreements "helps alleviate concerns regarding SOFI's personal loan performance."
He also noted that it could help to also alleviate concerns over the private credit market, which has come under significant scrutiny this year. He said the new business for SoFi shows that "demand from large reputable institutions appears to be very strong."
Meanwhile, Goldman Sachs analyst Will Nance echoed Dolev's sentiments in his own client note on Thursday.
"Overall, we view the expanded access to funding as a positive, and is consistent with our view that funding for consumer loans from private capital remains readily available, and that this funding stream is somewhat insulated from the headlines around private credit," Nance said.