Lending Club Business Loan Review
If you’re having trouble qualifying with traditional lenders and are looking for a loan of up to $300,000 with flexible repayment terms, Lending Club could be a good place to start. This platform offers a wide range of loans and products to fit a variety of expenses from purchasing new equipment to paying for emergency repairs or materials.
Lending Club Business Loan Rates & Terms
|$5,000 – $300,000
|9.8% – 35.7%
|Time To Fund:
|As quick as 2 days
|One to five years
|How To Qualify:
|600+ Personal Credit Score
$75,000 Annual Revenue
|Great Option For:
|Good Personal Credit
Works With All Entities Including Sole Proprietors
|Click “Check Rates” to apply to LendingClub
- APR range: Lending Club offers business loans with annual percentage rates ranging between 9.8% and 35.7%.
- Available loan terms: Lending Club’s loan terms start at one year with a maximum of five years.
- Loan amounts: This lender offers business loans between $5,000 and $300,000.
- Time to fund: Lending Club’s loans are relatively quick to fund, with time to disbursement ranging between two business days and two weeks. However, although their loans can fund as soon as within two business days, most fund within one to two weeks.
- Origination fee: Lending Club’s origination fees range between 0.99% and 6.99%.
- Credit needed: This lender has a minimum credit score requirement of 600. However, a credit score above 620 is preferred.
- Income needed: To be eligible for a Lending Club loan, your business should have an annual revenue above $75,000.
- Soft Credit Check? The lender will conduct a soft credit check during the initial pre-qualification phase of the application. If you’re eligible for a loan with Lending Club, they’ll then conduct a hard credit pull at the end of the application.
- Best for: A loan from Lending Club is best for borrowers who need fast cash or are looking to expand their businesses, make new equipment purchases, refinance other debts or pay for urgent expenses such as emergency repairs.
What Is Lending Club?
Lending Club is an online peer-to-peer loan marketplace that matches borrowers to interested lenders. Lending Club offers an easy online application and quick cash with disbursements within as soon as two business days to borrowers across a wide range of financial qualifications.
How Does Lending Club Work?
Lending Club works by matching borrowers to investors who are interested in acting as lenders. Prospective borrowers can use one simple, online application to gain access to several different lenders and products, allowing businesses to evaluate a variety of offers without having to fill out several different applications.
Because this lender’s online application is cost-free, finding out if you qualify for one of their loans may be worth looking into if you have a credit score above 600 and have been in business for at least one year.
Benefits of Lending Club
- Whereas most traditional lenders require at least two years in business to qualify, Lending Club only requires one
- Access to a variety of lenders and loan types with just one application
- Easy, online application
- Free to apply
- Wide range of amounts to fit different financial needs, with a maximum of $300,000 and loans as small as $5,000
- Flexible repayment terms
- Quick access to cash, with funding in as little as two business days
- Lower average APR than many online lenders
- No prepayment penalty
Drawbacks of Lending Club
- Personal guarantee required, even on loans below $100,000, so the borrower’s personal assets and credit score may be at risk in case of default
- UCC-1 lien required on loans larger than $100,000
- Higher APRs than with traditional banks, which typically offer business loans with rates between 6% and 10%
- Potentially high rates for borrowers with bad credit, with a maximum rate of 35.7%
How To Apply for a Lending Club Business Loan
If you’ve decided that you’re interested in applying for a business loan with Lending Club, you’ll start by filling out an application on their website to find out if you pre-qualify. At this stage, the lender will require you to submit your personal and business financial information, credit score and contact information. If you pre-qualify and decide to pursue an offer, the lender will then take a hard pull of your credit and require you to submit three months of business bank statements, an IRS Form 4506-T and your business tax returns.
What You Need To Apply:
Before applying, you should make sure that you have your personal credit score, any identification and contact information, business bank statements, business tax returns and the reason for your application prepared.
Lending Club will also ask you for a few additional pieces of information including:
- The previous year’s gross sales
- The previous year’s net profit (before taxes)
- Your personal annual income
- Your percentage of ownership in the business
- Monthly payments on other loans
Is Lending Club Legit?
Lending Club has an A rating with the Better Business Bureau (BBB) and uses industry standard technology to keep your information and data safe. While the lender maintains a relatively transparent application and borrowing process, over 270 formal complaints lodged against this service have been closed by the BBB within the past three years. Additionally, there is an alert placed on the lender, warning potential borrowers that their name is being fraudulently used in an online loan scam.
Make sure that if you receive an offer from Lending Club, that you carefully evaluate each element of the agreement. If you’re contacted by a representative who says they’re from Lending Club, also make sure to reach out to the company’s official customer service line or email address to confirm that the caller is really with the company.
How Does Lending Club Compare? Vs StreetShares Vs Funding Circle Business Loans
vs Funding Circle
Funding Circle offers a wider range of loans, with amounts of up to $500,000. While this lender’s interest rates are comparable, if you need very fast cash, Funding Circle might not be the right option for you as most of their loans fund within 10 business days.
StreetShares offers a smaller range of loan amounts, with products ranging between $2,000 and $100,000. StreetShares borrowers also may be charged higher annual percentage rates, with a maximum APR of 40%. Additionally, their repayment terms are less flexible than Lending Club’s, with a maximum term of three years.
Compare all business loans
If you’re weighing your business financing options and want more information, PrimeRates offers comprehensive reviews of several other business loan types, lenders and platforms. Even if you have a low credit score or own a brand new business, you still may be able to find a loan with low rates and flexible repayment terms. It’s important to take the time to understand all of your financing options before deciding on the loan that’s right for you.