Comments on: Change in Lending Club Cash Burn Rate Due to Quiet Period http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/ Lending Club and Prosper.com Experience Fri, 04 Jul 2008 20:34:55 +0000 http://wordpress.org/?v=2.5.1 By: Tom http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-422 Tom Tue, 15 Apr 2008 18:58:47 +0000 http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-422 It's also good for another reason. With LC money on the line they will likely be more aggressive with collections in the future. It’s also good for another reason. With LC money on the line they will likely be more aggressive with collections in the future.

]]> By: PLP http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-409 PLP Mon, 14 Apr 2008 16:50:47 +0000 http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-409 I am guessing that they have also take care of this cash flow problem - or at least they can if necessary. It would be easy to structure a deal with a bank to loan Lending Club the money for 6-8% using the loans as collateral. If the Lending Club were to go under, the bank would be able to take over the loans (as long as the borrowers contract is written correctly). If Lending Club works out (and I hope it does), Lending Club will earn a nice sum on the difference between interest rates and the bank would earn their ~7% on the loan to Lending Club. The bank would have the opportunity to loan out the money without any advertising or servicing overhead at a rate much higher than a current three year treasury note. Plus, it might help cement a relationship that could be mutually beneficial between the bank and Lending Club in the future because I am assuming if Lending Club and other P2P lenders continue to grow banks will somehow want to play in the same game. They must have thought of this, but as I mention, this is a large change in cash burn rate that must be accounted for. I am guessing that they have also take care of this cash flow problem - or at least they can if necessary. It would be easy to structure a deal with a bank to loan Lending Club the money for 6-8% using the loans as collateral. If the Lending Club were to go under, the bank would be able to take over the loans (as long as the borrowers contract is written correctly). If Lending Club works out (and I hope it does), Lending Club will earn a nice sum on the difference between interest rates and the bank would earn their ~7% on the loan to Lending Club. The bank would have the opportunity to loan out the money without any advertising or servicing overhead at a rate much higher than a current three year treasury note. Plus, it might help cement a relationship that could be mutually beneficial between the bank and Lending Club in the future because I am assuming if Lending Club and other P2P lenders continue to grow banks will somehow want to play in the same game.

They must have thought of this, but as I mention, this is a large change in cash burn rate that must be accounted for.

]]> By: DebtKid http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-407 DebtKid Mon, 14 Apr 2008 15:22:53 +0000 http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-407 Yeah, I'm sure they have arranged financing or have the cash to fund during the quiet period, otherwise they would have suspended borrowing as well. Yeah, I’m sure they have arranged financing or have the cash to fund during the quiet period, otherwise they would have suspended borrowing as well.

]]> By: Tom http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-406 Tom Mon, 14 Apr 2008 15:12:12 +0000 http://www.personalloanportfolio.com/85/change-in-lending-club-cash-burn-rate-due-to-quiet-period/#comment-406 I don't think the worst case scenario is Lending Club will run out of money. If things did get bad they would stop funding loans before they ran out of money. Prosper backers have put up $40 million. With how well LC is doing so far I don't think it would be hard for LC to secure some more capital. I don’t think the worst case scenario is Lending Club will run out of money. If things did get bad they would stop funding loans before they ran out of money.

Prosper backers have put up $40 million. With how well LC is doing so far I don’t think it would be hard for LC to secure some more capital.

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