The new multi-draw option enables borrowers to withdraw only the funds they need, as they need them—instead of extending all funds up front and charging interest on the full sum from the start of the term. Lending Club charges a 1% to 2% fee each time borrowers draw down on the line of credit.
It is free to apply for and open a line of credit—ranging from $5,000 to $300,000 with interest rates starting at 6%—and there is no hard credit inquiry.
Lending Club CEO Renaud Laplanche says the platform’s new multi-draw line of credit “gives small-business borrowers a predictable, flexible, low-cost way to access credit ‘on demand’ if and when they need it.”
To qualify for the new offering—tested in beta for the past few months with Alibaba.com and Ingram Micro customers—the borrowing company must have been operating for at least two years and have $75,000/year in revenue.
Lending Club debuted at FinovateFall 2007 in New York. Check out its retro launch demo here.