Venture capital-backed Lending Club is now offering business loans, TechCrunch reported.
The peer-to-peer lending marketplace, which takes banks out of the picture when it comes to making investments among peers, will offer business loans ranging initially from $15,000 to $100,000 and is set to offer up to $300,000 in the future. The loans will bear fixed interest rates that start from 5.9% with average interest rates pegged at 12.5%. The loan terms range from one year to five years and has no prepayment penalties and no hidden fees, the report said.
Renaud Laplanche, the Chief Executive Officer of Lending Club, told TechCrunch, "We want to cover the entire credit industry." He said that their current tech and credit products that are targeted for consumer loans can also be placed on auto, business, mortgage and others, the report said.
To date, Lending Club has already released consumer loans amounting to of $3.8 billion and is expanding at a rate of more than $750 million quarterly. Since providing the service in 2007, the firm has already increased its annual loan volume to more than two times every year, the report said.
Last year, the company was able to gather more than $200 million from its backers which included Google Capital, Foundation Capital and KPCB. That round valued the Lending Club at $1.5 billion. Its board members are composed of huge names in the industry like Mary Meeker of Kleiner Perkins, former Morgan Stanley Chairman and Chief Executive Officer John Mack and Former US Treasury Secretary Larry Summers, the report said.
The move to include business loans in its offerings is actually a smart move on the part of Lending Club. In fact, its rival in the P2P lending segment, Prosper, is already in the business of giving business loans. Other competitors like CAN Capital and OnDeck are already engaged in serving the small business lending market, the report said.
Join the Conversation