Published By Janet Gershen-Siegel at May 19, 2018
Lending Club online lender is an online 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.
Lending Club has their online presence here: https://www.lendingclub.com/. Their physical address is:
P.O. Box 39000
San Francisco, CA 94139.
You can call them at: (888) 596-3157. 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 invest in a variety of loans. The rate of return for investors historically, on average, been between 4.95% and 7.10%.
Lending Club offers business loans from $5,000 to $300,000. Their loan terms range from one to five years. Your business can get a quote in less than 5 minutes. Also, your funds will be available in as little as 48 hours in the event you are approved. Your company’s annual revenue has to be $75,000 or more. Also, your company has to be in business for 2 years or more.
You will need to have a personal FICO score of 620 or better.
Lending Club has rates of 5.99% to 29.99%, at a fixed monthly rate. They charge total annualized rates starting at 8%. There are no prepayment penalties.
Advantages are that the annual revenue requirement is not too high and the funds are available quickly. Another advantage is that there are no penalties for prepayment and the company is transparent about its rates.
Disadvantages include their fairly high maximum rates. Another disadvantage is their relatively high personal FICO credit score requirement.
That is a somewhat interesting combination, seeing as a borrower with a fairly high personal FICO credit score should have more options. And those options should, in general, have decent rates.
Hence companies that will do the best with Lending Club have owners with decent personal credit scores. Also, they will need the ability to pay back their debts on time or early. These companies need to have some history but they do not have to be runaway successes.
So for companies run by business owners with bad personal credit scores, or that cannot pay their debts on time, Lending Club will not be as good a choice. Better choices should be building business credit or obtaining unsecured business financing or maybe even cash flow financing. Business owners should know that they have other choices, even with bad personal credit.
Building business credit also has the advantage of being an asset which will increase any company’s value. Through building business credit, a business owner can get vendor credit and then revolving store credit. Afterwards, a business owner can also get fleet credit and cash credit for a company. Business credit even works for startup companies, and there is no personal FICO credit score requirement whatsoever.
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 if this choice will be good for you and your company. In addition, consider alternative financing options that go beyond lending. These include building business credit. Also, this is to best decide how to get the money you need to help your business grow.