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Lending Club Business Loans Review 2019

Feb. 5, 2019
Small Business, Small Business Loans
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Lending Club
  • Loan amount: $5,000 to $300,000.
  • APR: 9.8% to 35.7%.
  • Loan term: 1 to 5 years.
  • Funding time: As fast as two days but typically in a week or two.
Apply now at Lending Club
Before you apply for a Lending Club loan, find out whether you meet the minimum qualifications.
  • 600+ personal credit score.
  • 1+ years in business.
  • $50,000+ in annual revenue.
  • Own at least 20% of the business.
  • No recent bankruptcies or tax liens.
  • Provide collateral for loans of more than $100,000.
Lending Club is currently unavailable to borrowers in Iowa.
Do I qualify?

Lending Club provides quick access to cash, as well as flexible repayment terms and an annual percentage rate starting at 9.8% — comparable to that of bank loans for good credit borrowers.

Lending Club loans are good for:

Borrowers looking to refinance: The lender works best for those who have good personal credit and established companies with strong finances, which makes it a strong choice for borrowers looking to refinance existing debt

Business looking to expand: Lending Club term loans max out at $300,000

Businesses in need of fast cash: You can receive funding in as little as two days to a week

» MORE: Looking for a LendingClub personal loan?

Reasons to use Lending Club

Less stringent requirements than banks: Lending Club requires a minimum credit score of 600 and collateral only for loans over $100,000. Whereas banks can require personal collateral, such as your home, Lending Club requires only a UCC-1 lien; this allows the company to seize certain business assets if you default.

Competitive rates: The APRs for Lending Club business loans range from 9.8% to 35.7%. That’s a bit higher than at traditional banks, especially on the upper end; banks often charge 6% to 10% APR. However, they’re lower than at many online lenders, which can have APRs as high as 108%.

» MORE: Compare peer-to-peer business lending options

Quick access to cash: You can complete Lending Club’s application online in five to 10 minutes to get prequalified, after which you get a quote with no effect on your credit score. You could be funded within two days, but it may take a week or two depending on the size of the loan and how quickly you submit documents.

No prepayment penalty: You won’t be charged a prepayment penalty for paying off your Lending Club term loan early, which would let you save on interest. This isn’t always the case with online term loans, which may require you to pay the full fees and interest no matter when you finish payments.

Where Lending Club falls short

High rates if you have poor credit: Although APRs for business loans at Lending Club start at 9.8%, they can be as high as 35.7% if your credit and business revenue are less than stellar.

» MORE: Compare Lending Club with Funding Circle

Business assets on the line for large loans: Lending Club requires a UCC-1 lien on loans over $100,000, which includes your business’s liquid assets such as inventory, cash and accounts receivable, but not real estate or your personal property, according to the company.

Borrowers still have to personally guarantee loans of less than $100,000, which means failure to repay the loan puts your personal assets and credit score at risk. However, this is a common stipulation for small-business loans that don’t require collateral.

If Lending Club is the right fit, get started:

Apply now at Lending Club

Compare business loans

If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.

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