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Like General Motors extending credit to car dealers, Google will use Lending Club to finance resellers, service providers, and consultants in its supply chain while putting to work a portion of the tech giant's cash war chest.
January 26 -
Online marketplace lending platforms are filling real needs. But few banks participate in this booming niche, reflecting the industry's risk aversion and regulatory concerns as well as resistance to change.
January 22 -
Online lending marketplaces claim that they will revolutionize the financial services industry. But financial companies need a lot more than high-tech prowess to achieve sustained success.
January 12
Peer-to-peer and institution-to-small business loan marketplace Funding Circle launched a new fractional loan marketplace today, the San Francisco company announced.
The marketplace, which allows individual or institutional investors to invest in portions of Funding Circle's small business loans, will feature one- to five-year loans of $25,000-$500,000 with 5.99-20.99% interest rates, depending on the borrower's credit.
According to Funding Circle co-founder and U.S. managing director Sam Hodges, the fractional marketplace has been part of the company's vision from the beginning, but it took some time to work out the technical, legal, and compliance details, "to make sure everything is up to both the letter and spirit of the law," Hodges said in an interview.
Lending Club, which
Funding Circle recently bought a brokerage dealer and renamed it Funding Circle Securities to facilitate the transactions. Funding Circle underwrites every loan.
Investors will need to commit at least $50,000 to take part in the marketplace, and fraction purchases will be limited to $1,000 minimums. Hodges said investment will be open only to accredited investors, of which the company estimates there are approximately nine million in the U.S.
Hodges added that in addition to the IRA and 401(k) investors, Funding Circle wants to add more institutional partners, and has specifically targeted banks (as have several other platforms). Hodges said he was confident that Funding Circle would have either referral or direct purchasing partnerships with one or two banks by the end of the year.
