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.

The 1,700 Mile Move: 5 Lessons I Learned

I come from a family of non-movers. For example, my mom, once she married, became listless and lost her appetite and quite a bit of weight.  The doctor diagnosed her with homesickness.  She had moved less than five miles from her family home to her home with my dad.  (Yes, this is a true story!)

We moved one other time less than a 1/2 mile away, and even that was traumatic for her.

I have ventured farther in my lifetime, going 400 miles away to graduate school, but a 1,700 mile move is something else entirely.

Here’s what I’ve learned so far as we prepare to move from the Midwest to the Desert Southwest:

1700 mile move1.  We had way more “stuff” than I thought.  I knew we had a lot,
but wow, I didn’t know how much.  We’ve sold, thrown away, or donated at least half of our stuff.  Every time we think we’re almost done packing, more “stuff” seems to appear.  I wonder if we’ll ever be done!

2.  Plan for a long-distance move as early as possible.  We started selling our stuff back in early May, and so far, that stuff has brought in over $1,000.  However, even though I started selling items 8 weeks in advance of our move, it still wasn’t early enough.  We’re less than 5 days away from our move, and I am still waiting for our treadmill, file cabinet, and office desk to sell.

I was surprised to see that sometimes listing things to sell on eBay, Facebook, and Craigslist is like planting seeds.  I’ve listed some things, and there was no interest.  But then, say two or three weeks after I listed them, someone discovers the listing and buys the item.  Allowing enough time for things to sell is essential.

3.  Exercise equipment has no resale value.  Many people want to buy exercise equipment, but selling that equipment later is difficult.  Luckily, I bought our treadmill second hand for less than $100 a few years ago.  I don’t think it’s going to sell before we leave.  I think I’ll be taking it out for trash pick up.

4.  Moving 1,700 miles is expensive!  Luckily, my husband’s employer is paying for our move.  Still, even though we’ve seriously pared down our belongings, the move is going to cost over $6,000!  (We’ve paired down so much that the mover estimated two other families’ household goods could fit on the semi-truck with our small load.)

If my husband’s new employer wasn’t paying, I think the smartest financial decision would be to sell everything before we move and buy used once we’re in our new location.

5.  Determining the cost of living in a new location isn’t easy.  Since Tucson, Arizona (where we’re going) has a lower cost of living than Chicago, Illinois (where we’re leaving) and my husband received a substantial raise with his new employer, we thought we’d be in a better position financially.  That’s before we looked at the new company’s health insurance plan and saw how much worse it is than our current plan.  Most of my husband’s raise is going to cover the difference in the cost of insurance.

Have you moved a thousand or more miles away?  If so, what lessons did you learn?