The Dallas Morning News recently ran an article entitled “Dallas-Fort Worth entrepreneurs find alternative lenders” discussing how some of the city’s lenders were turning to peer-to-peer lending sites to get business loans where funding would otherwise be unavailable.
The article cited a recent survey from the National Small Business Association that most small business owners are unable to get adequate financing despite a recent effort on behalf of the Obama administration to coax banks into lending more money to small businesses.
The Dallas Morning News also covered what entrepreneurs are doing to cope with the lack of easy available financing and featured entrepreneurs who are using credit cards, taking out home equity loans, drumming up private equity investors and even making use of peer-to-peer loans from Lending Club for business expansion.
Although most loans from Lending Club are used for purposes of debt consolidation, many borrowers are taking out peer-to-peer loans from Lending Club to expand their business operations. Often business owners will take out a Lending Club loan to finance an advertising campaign, purchase equipment, or provide for short-term cash flow needs.
The paper contacted Lending Club CEO, Renauld Laplanche for a comment. When discussing small business loans, LaPlanche said that “I see lots of small businesses whose line of credit has been cut off.”
The loans that are available to small business owners and other borrowers on lending Club are unsecured, fixed-rate loans that amortize full over three years. Borrowers can request to borrow as much as $25,000 from lenders. To qualify for a loan on Lending Club, you need to have a credit score of at least 660 and have had no recent late payments.
