Upstart and Mosaic, specialty lending and finance companies that assist consumers in purchasing autos, solar panels, and home electronics, are facing challenges as a result of the Federal Reserve’s aggressive moves on interest rates which are jacking-up borrowing costs. When markets climbed last year, the lenders swiftly gained popularity among stock and bond buyers thanks to their use of artificial intelligence to locate and approve a significant number of customers. Some banks and credit unions have ceased purchasing the loans that the finance businesses produce, and investors have begun dumping asset-backed bonds that the finance companies have issued. 

Rising Interest Rates Put the Squeeze on Fintech Lenders