Lending Club [Profile]

Startup Profiles

Lending Club is the world’s leading online marketplace for business loans, matching businesses who want to borrow with investors.

  • LendingClub is the US number 1 online credit marketplace connecting borrowers and investors. It offers competitive credit and a better experience to consumers and business owners and fixed income investment opportunities to investors.
  • Products supported by the platform:
    • Personal Loans: fast funding up to $40k for personal loans
    • Business Loans: loans or line of credits for business consumers to finance their working capital or access liquidity with dedicated Client advisory service.
    • Funding options for Medical Practices to offer in conjunction of their care services.

Tailored Business offering (i.e. MarketInvoice), POS financing (i.e. Affirm), Large/LT loans,…

  • Uses technology to operate a credit marketplace at a lower cost than traditional bank loan programs.
    • Less precise but less costly due diligence model allow savings for re-financing personal loans. (up to for AVG 32% savings)
  • Online based credit rating models to identify the credit score and applicable interest rate in short amount of time
    • pricing offers within minutes (1-5) from the application
  • Being a marketplace, the risk is not taken and repackaged to be removed from the balance sheet via a financial instrument as traditional banks but simply matched with the investor looking for that specific risk exposure.

  • [Borrowers] Origination fees : From 1 to 7% depending on the loan grade and type of loan (business or personal)
  • [Investors] Servicing fees : 1% of the amount of any borrower payments (received within 15 days of the payment due date). (1)
  • Other relevant fees: e.g. Collection fee – Of any amount recovered 18% with no litigation, 30% of hourly attorneys fees plus cost if litigation is involved.

(1) Capped to the scheduled payment servicing fee in case of pre-payment.

As of 06.2015:

  • The company has partnerships with companies such as Google, Alibaba, Homeowners to refer the service as part of their offering.
  • The company announced the intention to expand their product line in car financing and mortgages.
  • Like other peer-to-peer marketplaces, Lending Club needs to incentivize both sides of the trade to join the platform.
  • The company experienced increasing difficulty attracting investors during early 2016. This led the firm to increase the interest rate it charges borrowers on three occasions during the first months of the year.
  • In early 2016, a scandal over some of the firm’s loans and concerns by the board over CEO Renaud Laplanche’s disclosures led Laplanche to step down.


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