Lending Club Corporation

 

The Lending Club Corporation, headquartered inSan Francisco,California, initially launched in May of 2007 as one of FaceBook’s first applications, with a program designed to bring together borrowers and lenders that shared common criteria, group affinities, and social relationships.  Over time, the company evolved into a multimillion-dollar industry that has matched thousands of borrowers with thousands of lenders willing to lend money to the masses for attractive interest rates.  The company now handles more than $300 million in active loans.

The founder and CEO of Lending Club Corporation is Renaud Laplanche, a French native with experience as aNew Yorksecurities lawyer.  He is also the founder of a database search firm called MatchPoint, sold to Oracle in 2005 earning Laplanche $10 million.  After a two-year stint with Oracle and some time off to travel inEurope, Laplanche returned to launch Lending Club.

Lending Club raised $10.26 million in a Series A funding round during August of 2007, led by Norwest Venture Partners and Canaan Partners.  The company followed this success with a Series B funding round led by Morgenthaler Ventures in March of 2009 that raised $12 million.  A Series C funding round held in April of 2010 led by Foundation Capital raised an additional $24.5 million for the company.

Lending Club is an attractive option to lenders for several reasons.  Lending Club has the distinction of being the first peer-to-peer lending company to have its offerings registered as securities by the Securities and Exchange Commission, completing the process in October of 2008 and posting the filed prospectus on the company’s website.  The performance statistics for the loans facilitated by Lending Club are published on a daily basis, with all current or updated information on the loans included in the daily updates, for anyone to view.

In order to minimize the risk of the lenders registered with the company, Lending Club focuses on borrowers that are highly credit worthy, rejecting any applicants with a credit score of less than 660, that have any recent bankruptcies, or have any current delinquencies.  Borrowers have the option of applying for 36-month (3-year) or 60-month (5-year) loan terms.

Lending Club lenders can use the company’s LendingMatch algorithm as a search tool that will help them create a sample portfolio based on the search criteria selected by the lender.  The lender makes the choices of which specific loans to fund and the funding amount that should be applied to each loan.  The company automates the rest of the process, including categorizing the loan applications of borrowers and assigning interest rates to each loan request.

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