LendingClub is America's largest loan marketplace. Not surprisingly, it also offers some of the best rates and terms available. As of April 2015, LendingClub had funded $9.26 billion in loans and provided investors with a median return of 8.3%. The secret of its success is simple, a fully online operation, which keeps the overhead in check, and low interest rates that compete with traditional lenders. LendingClub is based in San Francisco, California, was established in 2007, and has an A+ rating with the BBB.
LendingClub uses an online marketplace platform to connect investors and borrowers. Small business owners who are interested in a loan must complete an online application in which they provide information about their business. Investors then select which loans they wish to invest in. Once a loan has been fully funded by investors, funds are deposited directly to the borrower's bank account. Applicants usually receive offers from investors in just minutes and can assess their options without any impact on their credit score.
APRs for LendingClub business loans range from 7.77% - 35.11%. The origination fee ranges from 0.99% to 6.99%. As with most business loans, the lower interest rates are only available to borrowers with excellent credit and solid financial backing.
LendingClub offers business loans ranging from $5,000 to $300,000. Repayment terms range from 1 to 5 years.
LendingClub operates in all states except Iowa, Idaho, North Dakota, Rhode Island and Maine.
The entire application process is done online and it can take just a few minutes from completion to receiving offers. LendingClub does not require appraisals, business plans or a title insurance. Loans under $100,000 don't even require collateral. However, LendingClub does look for businesses with at least 2 years in business, a minimum of $75,000 in annual sales and the borrower must own at least 20% of the company and have a credit score of at least 660.
LendingClub provides low fixed interest rates with modest origination fees and no prepayment penalties. Repayment terms are longer than for most online marketplace lenders: 1 to 5 years, and small business can borrow up to $300,000. The entire application process is online, takes only minutes to get a response, and it doesn't hurt your credit score to shop around for the best deal investors are willing to offer.