Lending Club Moves To Serve Small Businesses

Date: March 21, 2014

Related Content: News Money Loans National

Peer-To-Peer Lender Offers Alternatives To Banks, Credit Cards

Lending Club, a peer-to-peer consumer lending
platform, announced on Wednesday that it is expanding its operations to make
loans to small businesses. Lending Club operates by matching small investors,
and occasionally larger investors and institutions, with borrowers. Since the
company began in 2007, it has originated $3.8 billion in consumer loans and is
expanding rapidly.

The company
plans to offer small-business loans of between $15,000 and $100,000 for a
period of one to five years. Interest rates are expected to average 12.5% for a
three year loan. Initially, the program will be limited to institutional
investors, but will be opened to retail investors after the first year. Lending
Club CEO Renaud Laplanche told Fortune, “Really, we will be more of an
alternative to a banking loan for smaller businesses not getting attention from
the banks. It’s not that their credit is bad. It’s really hard for the banks to
make a small business commercial loan work, considering the bank’s operating
cost and structure. It’s very expensive for a bank to underwrite a service, and
it’s not always worth it.”

Further Reading:

Read helpful tips from NFIB on how to successfully secure peer-to-peer funds.  Also, view our small business loan webinar.

The Wall
Street Journal

and TechCrunch both run stories on the
announcement, while Fortune runs a question-and-answer piece
with Lending Club CEO Renaud Laplanche.

This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.

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