Lending Club, the online peer-to-peer lending platform, said Friday (Sept. 18) that it is expanding its reach domestically, adding three states to its roster.
The company said that it now serves retail investors in Nebraska, Indiana and Kansas, bringing its roster of states served to 36, according to a release. The platform links borrowers and investors.
In a statement detailing the expansion, Lending Club Founder and CEO Renaud Laplanche said that “in a time of market volatility, and with uncertainty about future interest rate fluctuations making other fixed income investments less predictable, Lending Club’s retail investors have continued to enjoy returns averaging 5 to 8 percent annually since inception in 2007. We are excited to offer this investment opportunity to investors in more states.”
Under the current business model, Lending Club lets individual retail investors access consumer credit, investing in loans in increments of $25 and above. That allows for diversification across thousands of borrowers, which in turn lets investors build customized and risk-specific portfolios.
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The investments themselves are done as Notes, which account for each fraction of a loan purchased. The company said in its release that its Lending Club Notes have logged historical returns of as much as 5.2 percent to 8.9 percent, with grades assigned of A through C. In addition, among those investors with diversified portfolios and owning at least 100 Notes of similar size, 99.9 percent have seen positive returns, the company claimed. As has been seen across all states with Lending Club platforms, and extending into the three new aforementioned states, consumers choose either traditional investment or retirement accounts, and they receive monthly payments of both principal and interest as their borrowers repay their loans. The Lending Club participants can withdraw cash tied to these repayments at any time through linked bank accounts.
Beyond branching out in the U.S. on a state-by-state basis, Lending Club has also been partnering with big banks to offload some loans that are originated through its digital platform.
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