Phenomenal or Painful? Our Lending Club Review Helps You Decide
Note: our Lending Club review has been updated in March of 2022.
Lending Club online lender is a lending company and credit marketplace for investors. They offer term loans. We look at the specifics and drill down into the details in this Lending Club review.
Currently, their loans are all on offer via the Accion Opportunity Fund.
Lending Club: Background
Lending Club is located online here: https://www.lendingclub.com/. Their physical address is:
Dept. 34268
P.O. Box 39000
San Francisco, CA 94139.
You can call them at: (888) 596-3157. And their contact page is here: https://www.lendingclub.com/company/contact-us?first=true. You can also email them via their contact form, here: https://help.lendingclub.com/hc/en-us/requests/new?ticket_form_id=134447. They have been in business since 2007.
Lending Club works as a kind of credit marketplace. Investors can place as little as an initial deposit of one cent into an account and then they get to invest in a variety of loans. The rate of return for investors historically has averaged between 4.95% and 7.10%.
Term Loans
You can get business loans from $5,000 all the way up to $500,000. So their loan terms range from one to five years. Your company’s annual revenue has to be $50,000 or more. Also, your company has to be in business for 12 months or more. And you must own at least 20% of the business.
Fees for Term Loans
Lending Club has an origination fee of 3% to 6%.
Advantages of Working With This Lender
The advantages are that the annual revenue and time in business requirements are not too high. In addition, a business owner can get a fairly decent amount of money on loan. Furthermore, while they need to prove a certain amount of revenue coming in, that amount is not too high. There are lenders which require $10,000 per month in revenue. In contrast, this online lender wants to see less than $4,200 per month in revenue. This far more manageable figure could make this lender exceptionally attractive to startup ventures.
Lending Club: Disadvantages of Working With Them
So, the biggest disadvantages include this lender’s high annualized rates.
Takeaways
The companies that will do the best with Lending Club are captained by business owners who can pay back their debts on time or early. These companies will need to have some time in business. But they do not have to be runaway successes.
For companies run by entrepreneurs who cannot pay their debts on time, this lender will not be as good a choice as building business credit or getting unsecured business financing or even cash flow financing.
Lending Club: A Final Word
And finally, as with every other lending program, whether online or offline, remember to always read the fine print and do the math yourself. Be sure to go over the details with a fine-toothed comb, and then decide whether this option will be good for you and your company.
In addition, you should always consider alternative financing options that go beyond lending. And that includes building business credit. And you will be able to best decide how to get the money you need to help your business grow.
