Commitments and Contingencies

Lease Commitments

Operating Leases

In January 2013, we entered into an operating lease in Virginia for office space, which was amended in January 2015 (as amended, “Virginia Lease”) to extend the term of the lease and rent additional space. The Virginia Lease calls for monthly rental payments of $65,000, subject to escalation, and provides for a rent holiday of approximately six months and an aggregate $1 million leasehold improvement incentive.

During 2014 and 2015, we amended the lease of our corporate headquarters in New York City (as amended, “New York Lease”) to extend the term of the lease and rent additional space. We will occupy additional spaces under the New York Lease incrementally, as spaces becomes available, at which time we will incur additional rent payments. For all spaces delivered to us under the New York Lease as of December 31, 2016, our average monthly fixed rent payment will be approximately $0.5 million, subject to escalations. We are entitled to rent credits aggregating $3.8 million and a tenant improvement allowance not to exceed $5.8 million for all spaces delivered to us under the New York Lease as of December 31, 2016. The New York Lease is expected to terminate in December 2026.

In April 2015, we provided notice of termination to the landlord of one of our office spaces in Denver, Colorado (“Original Denver Lease”) resulting in a termination fee of $0.4 million, which was included in general and administrative expenses for the year ended December 31, 2015. The lease on that office space ("Original Denver Lease") expired in January 2016.

In June 2015, we entered into a sublease in Denver, Colorado ("New Denver Lease") as the subtenant. The New Denver Lease calls for an average monthly fixed rent payment of approximately $144,000. The New Denver Lease also provides for a four-month rent holiday and a tenant improvement allowance not to exceed $2.6 million and is scheduled to expire in April 2026.

Certain of our leases have free or escalating rent payment provisions. We recognize rent expense under such leases on a straight-line basis over the term of the lease and record the difference between the rent paid and the straight-line rent expense as deferred rent within other liabilities on our consolidated balance sheets. Improvements funded by tenant allowances are recorded as leasehold improvements and depreciated over the improvements’ estimated useful lives or the remaining lease term, whichever is shorter. The incentive is recorded as deferred rent and amortized over the term of the lease.

Rent expense incurred totaled $7 million, $4.3 million, and $2.1 million for the years ended December 31, 2016, 2015, and 2014.

Lease Commitments

At December 31, 2016, future minimum lease commitments under operating and capital leases, net of sublease income of $1.8 million, for the remaining terms of the operating leases were as follows (in thousands):



For the years ending December 31,
2017	$	7,710
2018	8,117
2019	8,686
2020	8,951
2021	9,192
Thereafter	42,411
Total	$	85,067

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash equivalents, restricted cash and loans. We hold cash, cash equivalents and restricted cash in accounts at regulated domestic financial institutions in amounts that exceed or may exceed FDIC insured amounts and at non-U.S. financial institutions where deposited amounts may be uninsured. We believe these institutions to be of acceptable credit quality and we have not experienced any related losses to date.

We are exposed to default risk on loans we originate and hold and that we purchase from our issuing bank partner. We perform an evaluation of each customer's financial condition and during the term of the customer's loan(s), we have the contractual right to limit a customer's ability to take working capital loans or other financing from other lenders that may cause a material adverse change in the financial condition of the customer.

Concentrations of Revenue

For the year ended December 31, 2015, we had one group of customers that accounted for approximately 13% of total revenue, which was recognized through gain on sales of loans.

Contingencies

From time to time we are subject to legal proceedings and claims in the ordinary course of business. The results of such matters cannot be predicted with certainty. However, we believe that the final outcome of any such current matters will not result in a material adverse effect on our consolidated financial condition, consolidated results of operations or consolidated cash flows.