Lending Club Is Now Offering Business Loans

You likely know Lending Club is a peer-to-peer lending site that offers personal loans to individuals as well as the chance for personal investors to invest by lending money to individuals.

Now, however, Lending Club is expanding their services and offering business loans.  This is of particular interest if you own a business.

If You’re Looking to Lend Money to a Business

If you’re already investing in Lending Club, you may want to lend money to a business as well.  However, ordinary investors cannot yet do that.  “For now. . .the program is limited to institutional investors such as hedge funds, insurance companies, and family offices that manage wealth for the very rich, but eventually the company plans to let anyone invest” (Bloomberg Businessweek).

How to Qualify for a Lending Club Business Loan

Business funding can often be very difficult to get, so Lending Club’s business loans offer businesses a nice alternative to traditional funding options.  In order to qualify for a loan, a business must meet these minimums:

  • At least $75k in annual sales,
  • a personal guarantor by at least one 20% or greater owner of the company, and
  • the guarantor’s personal credit must be at least “Fair”

What Are The Loan Details?

Businesses that apply for a loan can borrow up to $100,000 for 1 to 5 year terms.

The interest rate is fixed for the life of the loan and can be as low as 5.9% to as high as 29.9%.  The rate your business gets depends on a variety of factors including:

  • how long your business has been established,
  • how financially strong your business is, and
  • the credit worthiness of the business, among other factors.

“Lending Club Chief Executive Officer Renaud Laplanche says the average interest rate will be 12.5 percent” (Bloomberg Businessweek).

Lending Club offers a “check your rate” button on their website.  Simply enter how much you need and what you plan to use it for and then you’ll be taken to a form to fill out that will check your potential rate.  (Filling out this form does not affect your credit score in any way.)

One of the best perks of the Lending Club Business Loan is that you can pay it off early with no pre-payment penalties.

The Fine Details

When borrowing, checking the fine print is always best.  There are a few other fees attached to the loan.

Borrower Origination Fee

The origination fee can range from 1 to 6%.  That money will be taken off the top of the loan.  If you borrow $10,000, for instance, and your origination fee is 3%, you will receive $9,700 because the $300 origination fee is taken off immediately.

The borrower must pay the origination fee to cover the cost of issuing the loans as well as the screening process.

Unsuccessful Payment Fee

If your automatic payment fails, you’ll be charged $15.

Late Payment Fee

A borrower is given a 15 day grace period.  If your payment is later than that, you will be charged either $15 or 5% of the unpaid monthly payment, whichever is greater.

Check Processing Fee

If you opt to pay via check, you’ll be charged a $15 fee.  If you use direct debit, you are not charged a fee.

Funding your business can be difficult, especially if you go through traditional channels.  Lending Club is expanding their business to offer business loans, which is one more way you can potentially find money for your business, whether you’re using it for debt consolidation, marketing, or another purpose.

If you have a business, would you look at Lending Club as a potential lender?  If you invest in Lending Club, would you like to invest in their new business loans?

Is It Worthwhile To Still Use Credit Cards with So Many Data Breaches?

Just recently, PF Chang’s acknowledged that 33 of their restaurants had suffered a security breach over the last 8 months and that the credit card numbers as well as possibly the customers’ names and the expiration dates of the cards were compromised.  This news should be shocking or surprising.  Unfortunately, data breaches have become common place.  Just consider the recent security breaches at Target, Michael’s, and Neiman Marcus, to name a few.

If you’re diligent about shredding your personal information so that it can’t get into the wrong hands, you’re still not safe.  Consider all the recent security breaches.  It’s enough to make people start to think about not using credit cards just  to avoid this problem.

But even that is not a complete solution.  Yahoo! Finance just announced that a Russian gang has stolen billions of Internet passwords and millions of e-mail addresses.  “The records include confidential material gathered from 420,000 websites, ranging from household names to small Internet sites” (Yahoo! Finance).

The problem is so widespread.  If you want to live in the modern world, going without the Internet and credit cards to preserve your identity is very difficult.  Instead, consumers need to become even more diligent in their efforts to protect themselves and their identities.

Data Breaches Consider taking these steps:

1.  Change passwords frequently and make them difficult.

If you’re using “Sunshine” or “password123″ as your password, it’s time to step things up.  Choose passwords that have capital and lower case letters as well as symbols and numbers.  A password like “S&36ptrM$9″ will be much more difficult to crack than the passwords most people use.

Remember to also change your passwords frequently and avoid using the same password for all of your accounts.

2.  Protect your data.

When you shop online, you have the option to have the company save your credit information.  Do not opt to do this to protect yourself and your financial information.  Yes, entering your credit information every time you place an order online is a pain, but it’s much easier than trying to resolve identity theft.

3.  Order your credit report 3x year for free.

Each of us is entitled to one free credit report per year from each of the credit bureaus.  Make sure to order yours, but rather than ordering all three at once, stagger them.  Order one from Experian in January, one from Equifax in May, and one from TransUnion in September.  By staggering them, you can keep a close eye on your credit and notice fairly early if there is any unusual activity.

4.  Check your accounts regularly.

Especially if you have automatic payments set up, make sure to still take the time to look at your account to make sure there is no suspicious activity.

5.  Consider freezing your credit.

This is a radical step, but freezing your credit is the best way to protect your identity.  If your credit is frozen, no one can open a new account (including you) unless the credit is thawed using a special code you’re given when you freeze your credit.

Identity theft is an unfortunate consequence of our modern world.  You can’t avoid all technology to protect your financial information.  These strategies will help protect you while letting you use and enjoy modern financial conveniences like credit cards and ordering online.

Add Up Your Household Energy Savings

We’re deep into the hot summer months.  Air conditioners across the country are doing overtime keeping our homes and businesses cool and comfortable and keeping the heat outside.  Unfortunately, it won’t be that much longer before we’re turning on the heat and repelling the cold of winter.  All of that comfortable air, hot or cold, comes with a cost.  Sometimes you’ve got to do what you can to find whatever energy savings you can.

Here in the northlands of North Dakota, we’ve got plenty of options for powering our air conditioners and furnaces.  Predominately, we use natural gas for heat and electricity for the air conditioning, but also have options for dual gas/electricity appliances.  Our house uses electricity for AC and gas for the furnace.  (If you’re trying to compare services, using something like this energy conversion calculator can help figure out which service is really the better deal)

Add up Energy SavingsIf you’re looking for energy savings, comparing services is a great place to start, but there are some other ways that you can help cut the cost of your energy and make it’s impact on your wallet a little lighter.

Adjust the temperature

Adjusting the temperature on the thermostat a few degrees can reduce the amount of time that the air conditioner runs in the summer or the furnace runs in the winter.  Turn the thermostat up a few degrees in the summer and use some small fans to help move the air around to adjust the comfort level.  Do the opposite in the winter.  Turn the thermostat down a few degrees and use blankets and heavier clothing to help adjust your comfort level.

Invest in thermal shades

Even if you have a really efficient home, you’ll still lose thermal mass.  And the biggest culprit for that is your windows.  Investing in thermal shades and blinds can help keep the heat out in the summer and the cold out in the winter.  They’re more expensive, but unless you’re redecorating your house every year, they’ll last years and make up for the added cost in energy savings.

Program your energy savings

Does it matter to you if your house stays nice and cool during the summer while your at work?  Or nice and warm in the winter?  If we’re honest, we really only want our house warm or cold when we’re there.  If the house is empty for 8 hours or more a day, there’s really no reason to waste all that energy while we’re gone.  Buying and installing a programmable thermostat is the best way to be able to adjust the temperature while your away and still assure that your house is comfortable when you return for the day.  Set a schedule to adjust the temperature up or down by 5-10 degrees while your out of the house (or sleeping) and to return to your “comfortable” temperature just before you return home.

Spread the cost out

Once you’ve maximized the full energy savings potential, you still won’t be left without any energy costs.  There’s still going to be a bill showing up each month that will need paying.  If you’ve got one energy supply feeding your air conditioner in the summer and another feeding your furnace in the winter, like I do, chances are your bills will spike during the hottest and coldest months of the year.  Most utilities will have some sort of payment system that will allow for you to pay an even amount each month.  We’ve got both our electricity and gas accounts on such a program.  We pay a relatively flat rate each month to each utility, and avoid paying large bills during the extremes of the seasons.

What other ways do you employ to create energy savings for your household or business?