The big news from Lending Club this week is their announcement of a deal with Alibaba to fund short term loans for small businesses. These loans mark a significant departure for Lending Club in that these are very short term loans, terms are six months or less, and interest rates will range from 0.5% – 2.4% per month with loan amounts up to $300,000. The loans will be made to U.S. small businesses looking to purchase inventory from China through the Alibaba marketplace.
Also new with this program is a new kind of protection insurance program that Lending Club CEO, Renaud Laplanche, discusses briefly in this interview below on CNBC.
This is the second major partnership that Lending Club has announced in the past three weeks, clearly demonstrating they are looking for new areas of growth beyond their traditional unsecured consumer loans. No word yet on who will be funding these loans but I am sure they have some institutional investors lined up who are willing to invest.
Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.