LendingClub Review: An In-Depth Look at the Small Business Loan Offers

Starting a new business can be an exciting time, but there is plenty to consider from the outset. LendingClub fills a unique role with its peer-to-peer lending platform, reinventing the traditional role served by banks and lenders.

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    Financially Reviewed by Thomas J. Brock

    Financing needs can come at any time, whether you have owned a business for decades or are just starting out. Fortunately, today’s marketplace offers a variety of lenders to choose from.

    LendingClub fills a unique role with its peer-to-peer lending platform, reinventing the traditional role served by banks and lenders.

    As of December 2020, retail investors can no longer fund borrowers. However, business loans are still being provided through institutional partners.

    What is LendingClub?

    Started in 2007, LendingClub has worked with more than 3 million members. Rather than funding businesses themselves or connecting applicants with a traditional bank, LendingClub hosts institutional lenders. When you complete a loan application, your funding could come from a bank, financial advisor client, insurance company, or an investment company.

    Borrowers can choose from personal and business loans, auto refinancing, and patient solutions. Once an application is completed, borrowers can choose from different offers to select the loan option that best suits their needs.

    LendingClub partners with the Opportunity Fund, a nonprofit small business lender, and Funding Circle, a leading small business loan platform in the U.S., to provide applicants with access to prequalified offers to underserved small businesses such as minority and women owned companies.

    Advantages and Disadvantages of LendingClub

    Here is a list of some of the advantages and disadvantages of LendingClub:

    LendingClub Advantages

    • The quote process is straightforward and can be completed in 10-15 minutes.
    • Minority and women owned businesses may qualify for better financing through the Opportunity Fund.
    • There are no prepayment penalties.
    • Borrowers can apply for loans that cover a wide array of needs through one application.
    • Each borrower receives a dedicated client advisor to answer questions and help with the loan application process.
    • You can apply for additional loans before closing out older ones.

    LendingClub Disadvantages

    • There is no mobile app available.
    • Customers with less than $50,000 in revenues or less than 12 months in business will not qualify for loans.
    • Rates can run well over 20% for applicants with lower credit scores and indicators deemed as high risk by LendingClub’s risk model.
    • Qualification criteria isn’t clear for credit scores.
    • U.S. residents who are not citizens will not qualify for loans.
    • Origination fee is on the higher end compared to similar lenders.

    LendingClub was included in the list of the top 50 most innovative companies globally by media brand Fast Company and also appeared in the list of 2014 50 Class CNBC Disruptors. In that same year, LendingClub was rated one of the best places to work in the Bay Area.

    LendingClub Loan Features

    LendingClub offers term small business loans that are flexible in how they are used. This includes debt consolidation/refinance, marketing, inventory or equipment purchase, working capital, remodeling, business acquisition, emergency repairs, as well as other business purposes not listed on the website.

    Term Loans

    Loan Type

    Term loan

    Term Length

    1-5 years

    Repayment Period


    APR Range

    10.98% to 30.89%

    Min-Max Amount

    $5,000 to $500,000

    LendingClub Interest Rates and Fees

    Interest rates are determined by a proprietary risk model used by LendingClub (which is discussed later on). 

    Note that annual percentage rates (APR) differ from interest rates. The APR rates incorporate fees whereas the interest rates listed do not.

    As noted on their website, the best interest rates are available to borrowers with excellent credit and financial strength.

    Term Loans

    Loan Type

    Term loan

    Origination Fees


    Prepayment Fees


    Late Payment Fees


    Maintenance Fees


    Interest Rates

    4.99% to 24.90%

    LendingClub aims to create high yield savings accounts for current LendingClub Note investors. Going forward, LendingClub hopes to leverage its acquisition to offer more investment options in the future.

     How to Qualify for a LendingClub Loan?

     The following is a list of the minimum requirements for a LendingClub loan:

    • The business must have been active for a minimum of 12 months.
    • You must have at least $50,000 in annual sales.
    • There can be no recent bankruptcies or tax liens.
    • The loan applicant must have a minimum of a 20% stake in the business, be 18 years or older, and also be a US citizen.

    LendingClub does not have a specific personal credit score qualification minimum as they do not directly provide the loans. However, they suggest having a fair credit score which Experian defines as 580 - 669.

    Some loans may require collateral so it’s important to review these details of the offer before accepting.

    Currently, Lending Club is unable to take applications from Iowa and Idaho residents.


    Less than $100,000 loan

    More than $100,000 loan

    Minimum Credit Score



    Minimum Annual Revenue



    Minimum Time in Business

    12 months

    12 months

    The LendingClub Loan Application Process

    From the LendingClub website you will select the ‘Business Loans’ from the ‘Borrow’ dropdown at the top. This will open the Business Loans page where you will fill out three pieces of information.

    1. Requested loan amount
    2. Email address
    3. Reason for the loan

    Once you enter this information and select ‘Get a Quote,’ you will be taken to the main loan application page. This will route your application through the Opportunity Fund, LendingClub’s partner. 

    The main loan application will ask you additional business, personal, and financial information including:

    • Business legal structure
    • Industry
    • Number of employees
    • Ownership percentage
    • When you became the owner
    • TIN

    After your personal information, you will be required to enter information about your business including:

    • Gross annual sales from the prior year
    • Average monthly bank balance
    • Personal annual income
    • Annual net profit for the business
    • Loans and lines of credit expenses
    • Commercial real estate loan expenses
    • Equipment and vehicle leases
    • Rent or lease payments
    • Any existing loans you wish to pay off

    Once you complete this section, the Opportunity Fund will do a soft credit pull that will not affect your credit score. From there, the Opportunity Fund will either present you with an offer or decline your application, if qualifying criteria is not met.

    How Does LendingClub Determine Loan Amounts?

    Once the application is completed, LendingClub (or the Opportunity Fund) will generate a quote within minutes. Quotes will contain details including loan amount, interest rate, term length, origination fee, as well as other fees.

    Loan amounts and rates are based on a risk matrix assigned to each applicant. They categorize risk into grades A-F and sub-grades 1-5.

    For example, a risk grade of D4 is better than D5.

    LendingClub sets a base rate that is then adjusted for risk and volatility to come up with the interest rate. These calculations are done by LendingClub’s proprietary model. 

    Data considered includes:

    • Information provided on the loan application
    • Information provided by credit bureaus
    • Credit score, which predicts the likelihood that borrowers will make on time payments until loans are fully repaid
    • Debt-to-income ratio
    • Credit history length, the number of other accounts currently open, and usage and payment history with those accounts
    • Recent credit activity, including how many other credit inquiries have been initiated over the past six months

    Loan grades and risk modifiers are adjusted based on the requested loan amount and term.

    Up until recently, LendingClub provided investment services for customers. Interested customers could open an account and invest in borrower debt notes. This platform was retired at the end of 2020. This happened in conjunction with their agreement to acquire Radius Bancorp, the holding company of Radius Bank. 

    LendingClub Customer Support

    LendingClub offers multiple avenues to contact customer support. You can contact them toll free 7 days a week  from 8:00 AM - 8:00 PM you local U.S. time.. Additionally, LendingClub maintains Facebook and Twitter accounts for quick, informal contact.

    As noted earlier, each applicant is assigned to a dedicated U.S. based client advisor letting you speak to the same person every time. This dedicated support staff can help you fill out your application and request funding as well as review your offers and selections. 

    Unfortunately, LendingClub does not have a help section for business loans on its website at the moment. That said, you can find a wealth of helpful information in their blog. The blog covers both personal and business loans, so you will likely need to enter a search for your topic.

    LendingClub Loan Reviews

    Because LendingClub provides business and personal loans, reviews are not limited to small business customers. 

    LendingClub receives high marks across various site reviews. Trustpilot ranks LendingClub 4.8 out of 5 stars across 1,230 reviews.  Positive customer reviews highlight the personal customer experience, ease of the application process, as well as competitive rates and fees. At the same time, many reviews cite frustration with administrative fees. The transparency behind these fees led to a lawsuit from the FTC for non-compliance the company is currently fighting. However, to enhance trust with their customers, LendingClub has provided all the details regarding this suit on their blog.

    Most reviews listed on Trustpilot deal with issues related to personal loans. However, some customers stated confusion with being ‘pre-approved’ and then having their application declined. Customers might receive a pre-approved offer they respond to. At that time, LendingClub requests updated information from the credit bureaus. If your information changes, you will no longer qualify for the offer.

    Merchant Maverick gives LendingClub 4.5 out of 5 stars. In their review, they note benefits including no prepayment penalty and funding in one to four weeks.

    Better Business Bureau’s site contains 753 customer reviews giving LendingClub 4.25 out of 5 stars. Although the business has been accredited since 2008, it does not have a BBB rating.

    On the same website, you will find a note related to the company’s name being used fraudulently for an online loan scam as well as information related to the FTC case.

    Positive Reviews

    Negative Reviews

    US based personal client advisor 

    Undisclosed application fees

    Fast and straightforward loan application process

    Declines after receiving ‘pre-approved’ offers

    Ability to Compare offers

    Declines for additional loans

    Final Thoughts

    LendingClub fills a gap for small businesses that need funding when traditional banks aren’t available. Their ability to connect borrowers with multiple lenders means that you don’t need to shop around to compare offers.

    Loans come with flexible options including a choice of term structure and interest rates. Funding isn’t as fast as lines of credit and alternative loan products on other sites. Make sure that the time to funding meets your needs.