LendingClub, Opportunity Fund and Funding Circle announced on Tuesday (April 23) a collaboration aimed at providing small businesses with more affordable credit.
In a press release, the online lending marketplace LendingClub said that starting in April, it will connect applicants looking for a small business loan to the Opportunity Fund (a nonprofit small business lender) and Funding Circle (a small business lending platform). Opportunity Fund will use LendingClub’s technology to provide online applications for prequalified offers to underserved small business owners, while Funding Circle will use its credit assessment process to fund fast and affordable loans. The aim is to expand efficient access to affordable credit for more small business owners.
“With partners like Opportunity Fund and Funding Circle, we’re creating an ecosystem where LendingClub’s members can take advantage of additional services from trusted providers that can help them generate more savings,” said Scott Sanborn, CEO of LendingClub, in the press release. “This enables us to both deliver greater value to our applicants and capture a new revenue stream for LendingClub, while further simplifying our business and setting the stage for more partnerships and innovations for Club Members.”
Luz Urrutia, CEO of Opportunity Fund, said the partnership with LendingClub is an important part of its plan to grow lending from 13 to 45 states and to lend $1.2 billion by 2023. The loans are intended for women, people of color, immigrants and other underserved entrepreneurs.
“By combining LendingClub’s leading credit technology with Opportunity Fund’s mission-based, high-touch lending model, we hope to dramatically expand access to affordable and responsible capital to underserved small business owners across the country,” Urrutia said in the press release.
LendingClub has been in the process of opening its platform to include integrated offers from its partners. According to the press release, last year the company received more than 14 million applications, but facilitated loans to only a small fraction of them. The integration with Opportunity Fund increases accessibility and fairness for harder-to-underwrite small businesses. The relationship with Funding Circle expands access to low-cost credit for more businesses.