Lender Expanding To Small Businesses
Lending Club, the biggest "peer-to-peer" consumer-lending platform, is expanding to businesses.</br></br>The San Francisco-based company on Thursday will launch a platform for investors to fund loans to small companies. It joins a number of upstarts, including Dealstruck and Funding Circle, offering small businesses alternatives to banks, credit cards and short-term lenders.</br></br>The ventures aim to capitalize on a crunch that has been growing since the financial crisis. The value of outstanding commercial loans under $1 million at federally insured banks -- a proxy for small business -- has declined nearly 15% since 2008 to $287.6 billion in last year's fourth quarter, according to the Federal Deposit Insurance Corp. The data, the most recent available, aren't adjusted for inflation.</br></br>"We see a lot of unmet demand and needs in the market," said Renaud Laplanche, Lending Club's chief executive. "Small-business owners don't have access to bank loans, so they resort to just charging credit cards, paying a high interest rate, similar to the consumer side."</br></br>Lending Club has originated $3.8 billion in consumer loans since it began in 2007.