Lending Club Receives $10.26 Million for Bypassing Banks

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Lending Club Receives $10.26 Million for Bypassing Banks
August 23, 2007

Lending Club raised $10.26 Million from Norwest Venture Partners and Canaan Partners.

What does Lending Club do?

Lending Club matches individuals to lenders directly and bypasses the banks, lenders may be individuals so they also allow person to person loans.

VCU says:

Lending Club allows individuals to obtain loans without going through a bank. The idea is that members of Lending Club can borrow money more easily and at a better rate than they would get from a bank, or invest in a portfolio of loans at higher rates than those served by savings accounts or CDs. Lending Club’s technology is called LendingMatchâ„¢ which helps match lenders with borrowers using connections established through social networks, associations and online communities, and build diversified portfolios based on lender preferences.

Individuals can borrow money and also lend money thereby allowing person to person loans. Lending Club manages the money movement, loan repayment, and provides detailed reporting (as well as submission of relevant 1099 tax forms). If a borrower fails to pay, Lending Club will report the borrower to credit agencies and utilize a collections agency to recover the funds, if necessary. All borrowers are risk-assessed, and anyone with a credit score below 640 is turned down. Borrowers with a credit score above 640 might also be turned down if their overall debt level is too high. This filtering mechanism creates a safer environment for lenders.

See the Lending Club website.


Read more about Renaud Laplanche here


Read more about Norwest Venture Partners here

Read more about Canaan Partners here


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