Lending Club New Business Loan Lending Club New Business Loan
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Lending Club New Business Loan Review

Apply for Lending Club New Business Loan
Rating:
Bottom Line:
Great choice for those investing in a new small business who have average credit or better; peer-to-peer loans with a simple application process

Full Review:
If your business doesn't qualify for a small business loan from Lending Club because it's too new or doesn't make enough annual revenue, you're in luck because this popular peer-to-peer lending service allows its personal loans to be used for business purposes.


Types of Loans Available

Small business owners who are investing in a new small business or only looking to take out a small loan can borrow in amounts from $1,000 to $40,000. Since this is a personal loan for business use, you will be responsible for the loan as an individual — not your business. The loans are fixed rate with potential APRs ranging from 5.99% to 35.89%. It's important to note that loan amounts from $1,000 to $9,975 are only available for 36-month terms, while anything over $9,975 up to $40,000 can be repaid in a 36- or 60-month term.


Lending Club allows you to have up to two personal loans at the same time, which is a nice feature. In order to qualify for a second loan, you need to have made either six or 12 consecutive on-time payments on your existing loan, depending on its size and term. Additionally, the combined maximum amount for outstanding loans is $50,000. Small business owners who would like to borrow more than this amount might consider seeing if they qualify for a business loan through Lending Club, which allows requests for loan amounts up to $300,000.


Qualifying

To qualify for a personal loan from Lending Club, you must be at least 18 years old and either a U.S. citizen or be living in the U.S. on a long-term visa. You must have a verifiable bank account and average credit or better. The better your credit, the better the chance you will be approved to borrow the amount you're requesting — and the lower your APR will be.

It's important to note that Lending Club cannot lend to applicants living in Iowa or West Virginia.


Application Process

Lending Club's loan application process is quick and simple. You begin by requesting a quote and indicating the amount you'd like to borrow, which won't do any harm to your credit. Once you've provided the necessary information — including your name and contact information, birth date and yearly income — you will be presented with a number of loan options with different amounts, APRs and repayment terms. You can select whichever offer best fits your needs and continue into the loan application process. It's important to note that the amount offered may be lower than what you requested. You can, however, choose to withdraw if you aren't satisfied and opt to apply for another loan in the future. Keep in mind the origination fee will be taken from the total loan amount you receive, so you should plan for that in case you need a specific amount.

To complete your loan application, you will be asked to provide more information about yourself and your financial status, including proof of income and your social security number. Lending Club's in-house team will review your information and consider a number of factors, including your credit reports and scores, your debt-to-income ratio, the length of your credit history — as well as how many accounts you have open and your payment history with those accounts — and your recent credit activity. Your loan will be assigned a grade from A1 to G5 to determine your ultimate interest rate. Those who receive higher grades — A1 being the highest — will be presented with the lowest interest rates.


Once your application has been reviewed and approved, it will be made available for investors to consider. If your application is not approved, you can try again in 30 days. Lending Club is a peer-to-peer lending service, meaning the investors who fund loans are people or businesses who signed up and went through a screening process to invest in loans. Applications are available for a period of seven to 14 days. Once one or more investors have contributed the full amount requested, your loan listing will close and funds will be deposited into your verified bank account. The identities of both you and your investors will remain totally private throughout this time.

According to Lending Club, it can take between one to seven business days in total to apply, qualify and receive your funds. Once your loan listing has closed, it may take up to four business days for the money to be deposited into your bank account. Before money can be deposited, you must verify your bank account with Lending Club.

It is possible that you may only be funded for a partial amount of your loan request. If you receive at least 60% of the amount requested by the time the 14-day period ends, your loan will be automatically issued. However, if you don't receive at least 60% of the requested amount, the loan request will expire and you can choose to relist and try again. If you don't receive the full amount, you can accept the partial amount and relist for the difference, or cancel your request entirely. If you do not want to accept the partial amount, you must call Lending Club at least one business day prior to your listing's expiration date to cancel.


Repayment and Fees

Lending Club charges an origination fee of 1% to 6% 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 two to five years (24-60 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 beforehand to give you a head's up. You can also make payments by check if you wish, but it will cost an additional $7 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 — $15 or 5% of the unpaid amount (whichever is greater) for late payments and $15 for failed payments. 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

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.

Personal loan customers can contact Lending Club by phone or email. Toll-free phone support is available Monday through Saturday from 6 a.m. to 5 p.m. PT. Both phone and email support are quick, helpful and friendly. Additionally, Lending Club has an extensive help section for its personal loans 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.


Conclusion

Lending Club has a lot to offer to borrowers of all kinds, and it's nice that it makes the extra effort to provide loan options for well-established businesses as well as those just getting started. High-quality customer service and a fast, simple application process will ensure you get a quote in a timely manner, and low APRs combined with long repayment terms are sure to please. The peer-to-peer process might not be for everyone, but the opportunity to relist or take out an additional loan gives you a chance to get the money you need that you might not find elsewhere.

Disclaimer: The APR ranges from 5.99% to 35.89%. For example, with a credit grade of A1 you could receive a loan of $10,000 with an interest rate of 5.32% and a 1.00% origination fee of $100 for an APR of 5.99%. In this example you will receive $9,900 and will make 36 monthly payments of $301.15. Your APR will be determined based on your credit at time of application. Average APR on 36 month loans for similar solicitation from 10/1/2015-10/31/2015 was 14.3%. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% based on origination volumes from 1/1/2017 to 3/31/17. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement to all of the required agreements and disclosures on the www.lendingclub.com website. All loans made by WebBank, a Utah-chartered industrial bank, member FDIC.

Apply for Lending Club New Business Loan | Compare to Other Small Business Loans

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Service Details

Minimum/Maximum Loan Amount:$1,000 - $40,000
APR:5.99% - 35.89%
Terms Available:36 - 60 months
Origination Fee:1% - 6%
Owner's Credit Rating:~660+

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