Lending Club wants to take a deeper stance in the small and medium-sized business lending market. As the U.S.’s largest online marketplace, Lending Club has taken off with consumer borrowers. But a new loan product aimed at small businesses and entrepreneurs will aim to change that.
Reports from Crowdfund Insider on Thursday (Oct. 15) said Lending Club is now offering a new “multi-draw line of credit product” for SMEs.
[bctt tweet=”Lending Club is now offering a new “multi-draw line of credit product” for SMEs.”]
It’s a lending option to give small businesses a “predictable, flexible, low-cost way to access credit ‘on demand’ if and when they need it,” said Lending Club CEO Renaud Laplanche in a statement announcing the new service.
The company has reportedly been testing the SME lending product in beta phase for several months. While the platform has been offering a term loan product for small businesses since 2014, this new service means small business owners can apply and see whether they qualify for a loan in just a few minutes, according to reports.
Businesses must be in operation for at least two years with at least $75,000 in annual revenue to qualify, reports added.
The loan allows business owners to draw from the line of credit when they need it, instead of seeing a lump sum and paying interest on it all at once. The line ranges from $5,000 to $300,000, reports said, and businesses will pay a percentage fee for each time they draw from that line.
The new SME loan product was first piloted with corporate technology distributor Ingram Micro’s corporate customers, reports said. The company’s senior director of credit development, Kelly Carter, said that Lending Club’s new tool allowed the company’s business partners “to purchase technology directly from Ingram Micro via a credit line of up to $300,000” and thus acted as a trade financing solution.
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