Lending Club is the largest peer-to-peer loan marketplace in the world. Not surprisingly, it also offers some of the best rates and terms available. As of April 2015, Lending Club 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. Lending Club is based in San Francisco, California, was established in 2007, and has an A+ rating with the BBB.
How Does Lending Club Business Loans Work?
Lending Club 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.
What Are Lending Club Business Loans' Interest Rates?
Interest rates for Lending Club business loans range from 5.9% to 25.9%. The origination fee ranges from 0.99% to 5.99%. As with most business loans, the lower interest rates are only available to borrowers with excellent credit and solid financial backing. The average rate for all loan terms and risk profiles was 13.19%. However, borrowers with an A risk profile had an average interest rate of 7.65%.
How Much Money Can I Borrow from Lending Club Business Loans?
Lending Club offers business loans ranging from $5,000 to $300,000. Repayment terms range from 1 to 5 years.
Which States Does Lending Club Business Loans Operate In?
Lending Club operates in all states except Iowa, Idaho, North Dakota, Rhode Island and Maine.
What Is Lending Club's Business Loan Application Process Like?
The entire application process is done online and it can take just a few minutes from completion to receiving offers. Lending Club does not require appraisals, business plans or a title insurance. Loans under $100,000 don't even require collateral. However, Lending Club 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.
How is Lending Club Better than Other Lenders?
Lending Club provides low fixed interest rates with modest origination fees and no prepayment penalties. Repayment terms are longer than for most online peer-to-peer 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.