Lending Club, the world’s biggest peer-to-peer lender, has
launched a landmark tie-up with Google to provide small business
loans to the technology group’s partners. The deal with Google, one of Lending
Club’s largest investors, comes a month after the “P2P” lender debuted on
the New York Stock Exchange in a move aimed at raising new funds and increasing
awareness of the fast-growing peer-to-peer sector.
Peer-to-peer lenders, also known as marketplace lenders,
seek to use online platforms and new technology to connect borrowers with
lenders directly, in an easier and more efficient way than
traditional banking.
While Lending Club’s business was once focused purely on
consumer loan deals struck between individuals, more than half of its loans are
now said to be funded by large professional investors such as hedge funds and
wealth managers. Analysts said the deal marked an evolution for Lending Club,
where small business loans represent only 2 per cent of its lending. At up to
$600,000 for two years, the Google partner loans will be larger than the
maximum $300,000 that Lending Club has so far been offering to small business
borrowers.
Peer-to-peer lenders are striving to balance supply of new
loans on their platforms with demand from big investors who are keen to buy the
higher-yielding securities.
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