Lending nearly $11 billion since 2007, Lending Club is one of the world's largest online funders. Today, they offer business loans, personal loans, auto-refinancing, and patient solutions. Compared to traditional and other alternative loaning programs, Lending Club operates at a lower cost, giving borrowers access to a lower APR.
- Application Requirements
- Flexible Terms
- Low Rates
The "two years in business" requirement that Lending Club has is standard for bank loans, SBA loans, and even alternative lenders. However, the company's "$75,000 in annual revenue" requirement is much lower than some other lenders. This allows smaller businesses that may not qualify for standard business loans to take out a loan with Lending Club. Lending Club does not provide a minimum credit score for applications on their website because they don't want borrowers to be deterred. In an email to BestCompany, a Lending Club representative wrote that they generally recommend a credit score of 620 or higher, although there is no rule. People with a lower score may still be approved if they exceed other benchmarks.
Borrowers can select loan terms from one to five years. These term lengths are longer than many of their competitors' options. Longer terms allow business owners to take out more money at once for big purchases such as equipment, purchasing, or expansion. Even with the longer term lengths, there are never any prepayment penalties or closing fees with Lending Club business loans.
Interest rates for Lending Club's business loans range from 5.9 percent to 25.9 percent. APR for a $100,000 loan over one year comes up to $0.32 on the dollar. These costs are slightly below industry averages and better for the borrower.
- Long Terms Only
Depending upon your initial loan rate, there will be a loan origination fee deducted from your principal. Lending Club's business loan origination fee ranges from 0.99 percent to 6.99 percent. The loan offer you select will explicitly state the origination fee.
Long Terms Only
Some borrowers may want the long-term loans that Lending Club offers (one to five years). However, other businesses may be seeking shorter terms in months. For the latter, you can take out a one-year loan and pay it back early with no prepayment penalties. Additionally, Lending Club offers a Line-of-Credit product that may be better suited to short-term financing needs.