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If you’re a small business owner, there are all sorts of reasons you might be looking for a business loan. Maybe you need to purchase new equipment or consolidate existing high-interest debt. That’s where companies like LendingClub can come in.
LendingClub is an online lending marketplace that facilitates loans between investors (both individual and institutional) and borrowers (both individuals and businesses). It offers quick funding and a simple application process for loans between $5,000 and $300,000.
The most qualified borrowers will enjoy interest rates comparable to what you’d find at a traditional bank — but LendingClub’s lending requirements are usually easier to meet, making the online lender a more attractive option for many companies in need of business financing.
This LendingClub business loans review will cover everything you need to know about getting a loan from the company.
In this review:
- How to Get a LendingClub Business Loan
- Rates, Fees, & Other Basic Info
- Benefits of LendingClub Business Loans
- Downsides of LendingClub Business Loans
Getting LendingClub Business Loans
Potential LendingClub business loan borrowers can complete an online application in about five minutes, after which you receive multiple quotes based on the information you provided as well as a soft credit pull.
If you select a loan offer, you’ll then need to submit supporting documentation, which might include things like your business or personal tax returns, bank statements, or copies of your ID or business registrations.
Once the information in your loan application is confirmed and a hard credit inquiry is performed, your LendingClub loan will be officially approved and you will get the money in an average of seven days — although it can take anywhere from two business days to two weeks.
Requirements for Getting a Loan
LendingClub requires businesses to be in operation for 12 months prior to applying for a loan. You need to have at least $50,000 in annual revenue and no recent bankruptcies or tax liens. You also need to own at least 20% of your business and have fair or better personal credit.
Although some lenders require collateral before they will make a loan, the LendingClub only requires a lien against certain business assets for loan amounts above $100,000. For that reason, companies that have significant assets might be more likely to qualify for larger loans.
Because of these relatively loose lending requirements, LendingClub might be a good fit for businesses that are still growing, as well as companies that are looking to refinance other high-interest debt.
Basic Information: Rates, Terms, Fees, & Limits
Here’s what you can expect with a LendingClub business loan:
- Rates: 9.77% to 35.98% APR
- Terms: Six months to five years
- Fees: 3.49% to 7.99% origination fee; no prepayment fee
- Loan Amounts: $5,000 to $300,000
The Benefits of LendingClub Business Loans
LendingClub business loans are an attractive option for business owners for several reasons:
- Fast application and funding process
- Interest rates lower than many online lenders
- Flexible repayment terms
- Wide range of loan amounts
- Higher loan limits than some other lenders
- No prepayment penalty
- Less stringent credit requirements (accepts lower personal credit scores)
- No collateral for loans under $100,000
All of these factors make LendingClub, which has an A rating from the Better Business Bureau (BBB), a good choice for business owners who have been turned away from traditional lenders or who have less-than-perfect credit.
The Downsides of LendingClub Business Loans
As the saying goes, you have to take the bad with the good — and that applies to LendingClub business loans, too. The downsides of which include:
- High origination fees
- Funding can take up to two weeks — depending on your needs, this may not be fast enough
- UCC-1 lien required for loans over $100,000 (business assets at risk in the event of non-payment)
LendingClub business loans can be a great option if you’re looking for fast funding but need less stringent credit requirements to qualify. Ultimately, though, LendingClub probably isn’t a good fit for very small businesses with little assets that need significant financing or for businesses that have a good track record and are likely for a bank term loan at a lower interest rate.3.83 LendingClub Business Loans
Author: Jeff Gitlen