Lending Club Small Business Loan Lending Club Small Business Loan
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Lending Club Small Business Loan Review

Lending Club Small Business Loan
Rating:
Bottom Line:
Peer-to-peer lending service offers a simple application process and competitive rates for business owners with fair or better personal credit

Full Review:
Lending Club has made a name for itself as a peer-to-peer personal loan service, and its peer-to-peer business loans offer small business owners the same level of excellent customer service and competitive rates.


Types of Loans Available

Lending Club offers small business loans from $5,000 to $300,000 to businesses of all kinds — from retailers to contractors. Potential uses for the money include expanding your business, buying inventory, working capital, purchasing equipment and refinancing. Loans cannot be used for financial investing, gambling, adult businesses or illegal activities. The loans are fixed rate with potential APRs of 5.9% to 25.9%, depending on your business' financial strength, the business and owner's credit histories as well as the amount and length of the loan requested.


Loans under $100,000 are unsecured, meaning you don't need to provide any collateral. On the other hand, loans over $100,000 will require a UCC lien, which covers a business' more liquid assets, such as inventory, cash and accounts receivable. It does not cover real estate or personal property unrelated to the business, so your home or car won't be required as leverage at any point.

It's possible to take out more than one business loan from Lending Club, but in order to do so you must develop a track record of three to 12 timely payments on your initial loan.



Qualifying

To qualify for a small business loan from Lending Club, your business must be at least two years old, earn at least $75,000 in annual revenue and have no recent bankruptcies or tax liens. Additionally, the applicant must own at least 20% of the business and have fair or better personal credit. You won't be required to submit an appraisal, business plan or projection to be considered for a loan. Lending Club will perform a "soft" inquiry on your credit file (which will not harm your credit) and look at tax returns and bank statements to determine if you qualify.

Business partners cannot apply together, however, if you believe another owner could receive a lower interest rate, they can submit their own application. If your business does not qualify, you can always try applying for startup capital with a personal loan from Lending Club.

It's also important to note that Lending Club cannot disburse loans for businesses in Iowa, Idaho, Maine, North Dakota or Rhode Island.


Application Process

Lending Club's loan application process is quick and simple, and you can request a quote without harming your credit. The application asks for basic information about your business, including its name, address, how long you've been the owner, the number of employees, its legal structure and your financial information. If you are prequalified at the end of the application, you will be presented with multiple loan offers. Once you accept the offer that fits your needs, you will be asked to submit a list of documents before it can be approved and deposited into your bank account.


According to Lending Club, it can take between one to seven business days in total to apply, qualify and receive your funds. Before money can be deposited, you must verify your bank account with Lending Club.

If you are not approved, Lending Club will helpfully provide an "Adverse Action" letter that details the specific reasons your loan was declined. This letter includes directions on how to get a free copy of your personal and business credit reports to help you improve for future applications, which is definitely a nice gesture on Lending Club's behalf.



Repayment and Fees

Lending Club charges an origination fee of 0.99% to 5.99% of the total loan amount, which is based on your credit and other factors. This fee will be taken from your loan proceedings before the amount is disbursed to you, so keep that in mind when requesting a loan amount.

Repayment terms of one to five years (12 to 60 months) are offered, and there are no penalties for paying off your loan early or making additional payments. Doing so will help reduce the overall cost of your loan. Payments are deducted automatically from your bank account, and Lending Club will send you an email reminder a few days prior to give you a heads-up. You can also make payments by check if you wish, but it costs an additional $15 processing fee each time.

If you are late on a payment or your payment should fail due to circumstances such as an overdrawn bank account, Lending Club may charge a fee. The grace period for late payments is 15 days, and depending on how late your payment is, the service may report it to credit bureaus or even put your account in collections. If you are having trouble making a payment due to financial hardship or other circumstances, you can contact Lending Club to discuss your options, including the ability to move your payment date up or back by up to 15 days.


Customer Support and Trustworthiness

You can contact Lending Club and speak with a U.S.-based Client Advisor by phone Monday through Friday from 7 a.m. to 5 p.m. PT or send an email any time. Both phone and email support are quick, helpful and friendly. Additionally, Lending Club has an extensive help section exclusive to its business loan customers that covers many of the questions borrowers may have. The service goes out of its way to ensure no question is left unanswered, making it pleasant to deal with.


Lending Club makes its loans through WebBank, an FDIC-insured industrial bank located in Utah which has been in business since 1997. Both Lending Club and WebBank currently have an A+ rating from the BBB and are accredited by the organization. The service promises to protect borrowers' identities throughout the lending process and will not reveal any of your personal or identifying information to investors at any point during the application and funding process.



Conclusion

Lending Club has a lot to offer small business owners who are looking to take out a loan in a less-than-traditional manner. High-quality customer service and a fast, simple application process will ensure you get a quote in a timely manner. In addition, low APRs and long repayment terms will appeal to business owners of all types. Newer businesses or owners with poor credit may not find what they're looking for with Lending Club, but it will serve many others well.

Compare to Other Small Business Loans

If you have a question or concern we haven't answered on our site, please let us know. Your question will be added to the NextAdvisor Forums so that we and other experts in our community can answer it. Due to volume, we aren't able to respond to every question, but we answer as many as we can.



Service Details

Minimum/Maximum Loan Amount:$5,000 - $300,000
APR:5.9% - 25.9%
Terms Available:12 - 60 months
Origination Fee:0.99% - 6.99%
Minimum Business Age Required:2 years
Minimum Annual Revenue Required:$75,000
Owner's Credit Rating:~660+

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