Unit economics for personal loan business

Strategic Finance project– Personal Loans Unit Economics

Unit economic analysis is a critical element of understanding any business, and personal lending is no different. In this case study, we would like you to prepare a unit economic analysis that demonstrates the expected profitability of the average SoFi personal loan.

Deliverable
Your final output should be an excel-based model demonstrating the expected profitability of a typical SoFi personal loan
The final output should include:
Expected revenue generated per loan, and a breakdown of that revenue into the relevant line items
Expected expenses incurred per loan, and a breakdown of those expenses into the relevant line items
Expected profitability per loan, based on the above
A summary of key assumptions used to drive the analysis
Any additional ratios/KPIs you deem relevant
No formal presentation is expected or required, but be prepared to talk through your assumptions and modeling approach to the class in a 15-30 minute discussion setting
Additional Information
Useful information to inform your baseline assumptions can be found in the following locations:
Securitization rating reports, such as the DBRS Morningstar Rating Report for SCLP 2023-1S
SoFi’s 2Q23 Investor Presentation
SoFi’s 1Q23 10-Q