LendingClub Review

Friday, September 29th

2023 Business Loan Provider Reviews

LendingClub

• Fixed-rate personal loans from $1000 to $40,000 for new/small businesses
• Fixed-rate business loans from $5000 to $500,000 for businesses with at least $50,000 in annual sales and 12+ months in operation

LendingClub isn't the peer-to-peer platform it used to be (and the reason why "club" was in its name in the first place). Instead of relying on multiple lenders/investors to fund their borrowing requests, businesses can now take advantage of LendingClub's streamlined structure that is more like a regular bank.

Loan requirements for new businesses

You'll notice that there are two options there. If you're a new business, your loan would be structured as a personal loan. In that instance, you can expect to qualify for up to $40,000 and get a loan with APRs anywhere from 8.05% to 35.89% and a one-time origination fee of up to 6%. Your rates and terms will depend solely on your personal credit. That's a nice option to have, considering that some of LendingClub's competitors won't fund you at all unless you meet certain thresholds for annual profits and time in business. Personal loans through this institution are backed by WebBank, an "A+" rated and accredited company through the BBB.

Loan requirements for existing businesses

On the other hand, if you've been in operation for at least a year and have annual sales of at least $50,000, you're eligible to apply for a business loan through LendingClub. They partner with Accion Opportunity Fund for all of their business lending.

New processes application process

If you're applying for a personal loan through LendingClub, enter the requested loan amount (between $1,000 and $40,000) and select the loan's purpose in the dropdown box, then "Check Your Rate" . LendingClub will try to verify your credit history based on your name, address, and birthdate. You'll be asked for your Social Security Number if they can't locate your credit report with the other details. If LendingClub is able to offer you a personal loan to use for your business, you'll see all of the rates and terms on the next page.

Existing business application process

On the other hand, if you qualify to apply for a business loan, you'll start in the same way: entering the amount of loan you need (up to $500,000) and choosing the category that represents how you intend to use the funds (inventory purchase, marketing, remodeling, and so on). When you click on the "Get a Quote" button, you'll be redirected to the Opportunity Fund page - which, while carrying the LendingClub logo at the top, is no longer serviced by LendingClub itself.

Still being re-evaluated by the BBB

LendingClub is still under evaluation by the BBB: because the company underwent such a major overhaul, it takes time to establish any patterns of customer complaints and responses from the business. That's all normal and not a reflection of any trustworthiness issues. Plus, LendingClub had an "A" rating prior to their restructuring.

Different reputations of backing lenders

We want to keep an eye on the different ratings of the lenders that back LendingClub's business loans. While WebBank, the partner for the personal loans required for smaller, less established businesses, has an "A+" from the BBB, Accion Opportunity Fund has a much less reassuring "B-" rating. That's not a good sign, considering that LendingClub essentially hands you off to them from the very start.

Too many unanswered questions

While we like LendingClub in general and are really encouraged to see lots of positive customer feedback coming through after the company's restructuring, we just don't feel very confident about how they're approaching business loans at this time. It's great that they have an option for newer businesses, but there are competitors who offer funding that doesn't require the sky-high interest rates of a personal loan to do it. Plus, with no servicing coming from LendingClub on actual business loans - just a transfer to Accion Opportunity Fund - we think there are plenty of other lenders out there that are more straightforward. We recommend looking at a higher-ranked financial institution for your business loan.