LendingClub Small Business Loans Review


What is LendingClub?

Founded in 2006, San Francisco-based LendingClub has grown into a public online lending company that offers both personal and business loans. LendingClub is an online platform that pairs qualified borrowers with lenders. The company counted Union Square Ventures and Canaan Partners among its investors prior to going public in 2014. LendingClub calls itself America’s largest online credit marketplace with more than $20 billion in funds issued.


LendingClub highlights

With LendingClub’s online process, an applicant can learn whether they prequalify quickly for a business term loan of one to five years. Rates, though better than one would get from most short-term lenders, are up to 35.71% APR depending on the risk of the loan, and origination fees are 1.99% to 8.99%. Those are higher rates and fees than many standard bank loans. But LendingClub takes on somewhat higher-risk customers than most banks. For less risky borrowers, LendingClub’s rates are comparable to traditional banks. LendingClub does not charge a penalty for early loan repayment.


What LendingClub offers?

LendingClub offers business installment loans of $5,000 to $300,000 for terms of one to five years.

Loan product Loan amount Loan term APR range/ factor rate Fees Time to funding
Term/installment loan $5,000-$300,000 1-5 years 9.77% to 35.71% Origination fee from 1.99% to 8.99%. Application, approval and funding process takes an average 7

Rates current as of 6/14/2018

Once the loan is approved, funds are deposited in your account electronically. This can take a few days depending upon your bank.


Eligibility requirements

Loan product Annual revenue Min. business credit score or personal credit score Time in business
Term/installment loan $50,000 Fair (580-669) personal credit score. A year or more.

Additional eligibility factors

  • No recent bankruptcies or tax liens
  • Own at least 20% of the business
  • Operate primarily in the U.S.
  • Be a U.S. citizen or permanent resident, or live in the U.S. on a valid long-term visa
  • Have a valid bank account and email address
  • Be 18 years old or older
  • LendingClub does not require collateral for loans of $100,000 or less. For loans of more than $100,000, LendingClub requires a blanket lien on business assets, but no personal property.

Businesses that are not eligible for LendingClub loans:

Financial investing, lending, gambling, adult entertainment and/or materials, and illegal activities are not eligible. Loans aren’t available for nonprofits, religious or political organizations.

The company does not accept applications from businesses in Iowa, Guam or Puerto Rico.


How to apply for LendingClub financing

Fill out an online form to see whether your business prequalifies. If it does, you will get offers to choose from. Complete your application by verifying your bank account and uploading required documents. In some cases, LendingClub may ask additional questions or request additional documents. If the application is approved, funds are deposited directly to your bank account.

Documents to apply

  • Business tax returns.
  • IRS 4506-T Form.
  • Proof of personal income such as tax returns and pay stubs.
  • Proof of identity and business address, such as photo identification and recent utility bills.

Pros/Cons

Pros Cons
 Relatively painless application process and quick turnaround.   Potentially high rates and origination fees for higher-risk borrowers.
  Longer terms and lower rates with lower payments than some other options.   At least fair credit rating required.
  Easier to get than some bank loans.   Lien on business assets required for larger loans.

Who is the best fit?

Established business owners with solid credit will do best with a loan from LendingClub.


Fine print

LendingClub’s website is easily navigated and thorough. Be alert to potentially high origination fees and interest rates, depending upon your credit.


The bottom line: How LendingClub stacks up

LendingClub can be a solid option if your credit falls a little short of bank standards, and is potentially something to consider even if you could get a bank loan. Just be aware that, as with other loans, the less creditworthy you are, the more you’re likely to pay.