Get funding of up to $500,000 for your small business needs.
This peer-to-peer lender offers small business financing faster than a bank without the strict requirements. And with its wide range of loan amounts and terms, you could find the funds you need with monthly payments your business can afford.
|Product Name||LendingClub Business Loans|
|Minimum Loan Term||1 year|
|Maximum Loan Term||5 years|
|Requirements||12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better|
- Owned the business for at least 2 years.
- Currently be at least a 20% owner of the business.
- Be at least 18 years of age.
- Be a United States citizen or permanent resident, or living in the U.S. on a valid, long-term visa.
- Have a valid bank account and email address.
- The business must have made at least $50,000 in sales last year.
- Operate primarily in the United States.
First, do I qualify?
To be eligible for a LendingClub small business loan, you must:
- Have been in business for 2 years or more
- Generate at least $50,000 in annual sales
- Have no recent bankruptcies or tax liens
- Own at least 20% of your business
- Have fair or better personal credit
- Not live in Iowa or West Virginia
What makes LendingClub small business loans unique?
One unique benefit that comes with LendingClub small business loans is access to a client advisor. A LendingClub client advisor can help you navigate how you use your business loan funds and budget for repayments.
LendingClub offers low origination fees and fixed interest rates that are completely transparent. Small business loans can also be funded in as little as a few days, which means that you can get the capital you need for your business right away.
You’ll find no prepayment penalties when it comes to paying back your loan, providing the potential for you to save a good deal of money on would-be interest payments.
What is a LendingClub small business loan?
LendingClub is a peer-to-peer lender that primarily offers fixed-term small business loan. Businesses that borrow from LendingClub commonly use loans to consolidate debt, purchase equipment, expand its location or even hire new employees.
LendingClub doesn’t ask for collateral on loans under $100,000. Once borrow more than $100,000, it requires a blanket lien on your business assets.
LendingClub partners with Funding Circle and Opportunity Fund
LendingClub and online lender Funding Circle and nonprofit lender Opportunity Fund to expand its business loan offerings. Since the partnership, LendingClub increased its maximum loan amount from $300,000 to $500,000, slightly reduced rates and relaxed eligibility requirements.
The aim of the partnership is to bring more funding to a wider range of business owners, including women and minorities.
What are the benefits of a LendingClub small business loan?
- More relaxed requirements than banks. While many banks require borrowers to have excellent credit and put up their assets for collateral, LendingClub only requires applicants to have fair credit and only asks for a lien on business assets. In other words, you don’t need to have excellent credit to get approved and won’t lose you house if you default.
- Fast funds. Approval decisions are made quickly, and funding can be sent to your business account via ACH in just a few business days.
- Prepay without penalties. If you want to make early repayments on your loan, you can do so without incurring extra costs. By prepaying your loan, you’re saving yourself interest expenses and lowering the overall cost.
- Wide range of loan amounts. If you qualify, you can borrow anywhere from $5,000 to $500,000.
- Fixed interest rate. You won’t have to worry about your rate — or your payments — suddenly changing on you.
What to watch out for
There’s a lot of good when it comes to LendingClub small business loans. But as with any loan, you’ll want to be cautious. Borrowing a large amount and even being funded quickly can backfire if you aren’t careful.
Here are a few things to look out for:
- High maximum funding limit. You might be asking yourself why this is a drawback and a benefit. Borrowing more than you need can create issues down the road with repayments — or at the very least, cost you more money than necessary.
- Lien required for large loans. When you borrow $100,000 or more, LendingClub requires borrowers to put a Uniform Commercial Code (UCC) lien on business assets.
- Check fee. If you want to pay by paper check, you’ll pay a $7 fee.
- Not for new businesses. You must be in business for two or more years to qualify for a LendingClub personal loan. If your business has been around for less than two years, learn more about startup loans.
How is LendingClub’s online reputation?
It’s mixed. LendingClub gets an A+ rating from the Better Business Bureau (BBB), which it’s been accredited with since 2008. However, it has almost twice as many negative reviews as positive on the BBB page. On top of that, nearly 250 customers lodged formal complaints with the bureau. LendingClub did just as poorly on Trustpilot, where it only scored a 5.9 out of 10 based on eight customer reviews.
What do customers say?
The majority of complaints against LendingClub involve glitches in the application and repayment process. A handful customers were upset they were denied after getting preapproved. Some claimed LendingClub had charged them more than once for a repayment. Another filed a BBB complaint after their funds were not disbursed on time.
Unlike many lenders, LendingClub reacts to all BBB comments with detailed and personalized comments. It’s also closed all formal complaints filed with the BBB, showing that it takes customer complaints seriously. And not all reviews were bad. Several Trustpilot users were very happy with LendingClub’s turnover time, customer service and the way it handled problems.
Our takeaway: Keep an eye on your account for technical mishaps and reach out to customer service if you notice anything that looks wrong. Also, make sure you meet all eligibility requirements before you apply.
Compare LendingClub to other online business lenders
Am I eligible to apply with LendingClub?
Before you apply with LendingClub, you’ll need to meet the following criteria to be considered for a loan:
- Your business has been in operation for 2 or more years.
- You make at least $50,000 in revenue annually.
- You have no recent bankruptcies or tax liens in your credit history.
- You own at least 20% of your business.
- You have fair or better personal credit.
On meeting the eligibility requirements, you’ll need to complete the application and submit some paperwork. To apply with LendingClub:
- Click the “Go to site” button on this page.
- Indicate the funding amount you need.
- Complete your financial information.
- Complete your business’s information.
- Complete your personal information.
These steps should take only a few minutes to complete.
If you’re approved, you‘ll be required to submit additional verification that includes:
- Government-issued ID, such as your driver’s license or passport.
- Bank statements for business accounts.
- Proof of personal income.
- Business tax returns.
- IRS Form 4506-T.
Sam's Club members get 20% off
You might want to take a closer look at LendingClub if your business is a Sam’s Club member: The two have a deal that allows members to get up to $1,800 off on business loans. The discount is deducted during loan closing and only applies to origination fees. How much you can save also depends on your creditworthiness, your loan term and loan amount.
I got the LendingClub small business loan. Now what?
As you’re taking the steps to grow your small business, you’ll need to keep on top of your payments.
Your first payment will be due 30 days from when the funds are issued. This doesn’t change if it takes longer for them to get into your account due to your bank.
Electronic payments are the easiest way to repay your loan. If you aren’t signed up for autopay, LendingClub will email you a few days before your bill is due to receive payment.
Remember that when you take out a loan with LendingClub, you get access to a client advisor who is available to help you with any questions you might have, Monday through Friday.
LendingClub offers fixed term business loans at reasonable rates that can help you grow your business. Taking out a business loan is a big deal, and it’s important to find a lender that fits your needs. Be sure to compare your business financing options and check out lenders like LendingClub before settling on any one loan.