Poll Results: Lending Club will Survive

Lending Club Quiet Period Survival Kit

A few months ago, I posted a poll asking readers if Lending Club would survive the quiet period. Readers believe by a large margin (31 votes to 11 votes) that Lending Club will survive the quiet period.

I hope that Lending Club will survive as is. I like the P2P lending platform that they built and so far my Lending Club P2P loans are still performing great. Although, I do have my fingers crossed on the loan that was late temporarily.

Lending Club Quiet Period Survival Kit
More interesting than the results are some of the comments received [Read more...]

Lending Club Promissory Note Details – June 2008

While looking up the details on the loan that I had reported as late, I noticed the Lending Club Promissory note text. I thought I would capture this for comparison purposes in case it changes after the quiet period.

The text “goodkarmaplease” in the Promissory note intrigued me so I searched for that on google, but only 11 pages show up in the search results (114 pages if you choose to make similar pages appear in the search results.) None of the search results have anything to do with Lending Club. In fact, goodkarmaplease seems to be someone’s YouTube user ID.

The Lending Club Promissory Note text as of June 8, 2008 at 11PM central time: [Read more...]

Lending Club late loan is current again

Surprisingly, my Lending Club late loan is now current again. That puts me back to 100% current loans at an average interest rate of 11.23%. Thank you to the borrower for catching back up on your payments.

My first late loan at Lending Club

Sorry for being nearly as quiet as Lending Club lately. A quick update on my Lending Club portfolio is in order. Most importantly, I had my first late loan. It is only 16-30 days late, but as most P2P lenders know, once a P2P loan is delinquent there only a small probability of recovery.

Before the quiet period started, I had participated in 51 loans for a total of $1,250.17. Two loans are fully paid, 48 issued and current, and one late (details below). The weighted average interest rate [Read more...]

Poll: Will Lending Club Survive the Quiet Period?

Quick poll for your thoughts: Do you believe that Lending Club will survive the quiet period.

Will you invest in a Lending Club IRA?

  • No (38%, 13 Votes)
  • Yes (32%, 11 Votes)
  • Maybe (30%, 10 Votes)

Total Voters: 34

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Please take a minute to mention the reason(s) why or why not in the comments. Thanks.

Change in Lending Club Cash Burn Rate Due to Quiet Period

Lending Club Burn Rate - Money on Fire

Lending Club has gone quiet and is no longer allowing lenders to lend, but borrowers can still borrow money according to their email notice. Those loans will be funded by Lending Club. From the email notice:

The borrowing side of our site will remain generally unaffected by this registration process; borrowers can continue to apply for loans and new loans posted after April 7, 2008, will be funded and held only by Lending Club.

This made me start to consider the change in the Lending Club cash burn rate (definition of burn rate). Since I have no idea what Lending Club’s burn rate was, I can only estimate the delta in the burn rate.

Lending Club Cash Burn Rate

Debt Kid mentions in his take on the quiet period that he thinks that a high estimate of Lending Club’s burn rate was $400,000 per month considering 22 employees. The pre-quiet period burn rate is not nearly as important as the change the burn rate since Lending Club agreed to fund all borrowers until the SEC issues are sorted out.

Lazy Man asked what loans would be funded, but to make my delta calculation, I will assume that similar loans will be funded as were being funded before the quiet period since Lending Club said “borrowing… will remain generally unaffected.” I will also assume that the loan volume will stay the same since borrowers are not nearly as concerned about the stability of the company as lenders.

Lending Club Stats lists the March originations as just over $4 million. So the burn rate will be rate at which cash is loaned out plus the interest received in the mean time. I assume also that lending club will receive the average interest rate of approximately 12% and that Lending Club will still capture the same origination fees.

$4 million per month [Read more...]

Lending Club, Prosper.com, and more: P2P Lending News Roundup

P2P Lending has been in the mainstream media news a great deal lately. I decided to post a roundup of many of the recent news articles on Prosper.com, Lending Club, Zopa, GlobeFunder, and Virgin Money. It is unfortunate that Lending Club entered a quiet period just as they were gaining tremendous growth in loan volume.

CNBC February 5th, 2008: From Zero to Millions: Financing Your New Business:

Online Family Lending Use a lending network designed for inter-family loans, such as CircleLending.com. Tools at that site will help you and your relative come to terms on the length of the loan and the interest rate, and calculate the monthly payment amount. For $99, CircleLending issues a legally binding promissory note and a repayment schedule. For $9 per payment, the company will set up automatic repayments using electronic funds transfer.

Peer-to-peer Lending: Several websites now make it much easier to find an investor who will back your business. Check out prosper.com, lendingclub.com and zopa.com.

Lending Club’s founder financed his first company with personal loans and high-interest credit cards. He eventually sold the business to Oracle. That experience inspired his new company. Lending Club, which launched on Facebook in May 2007 and on its own site last September, uses technology to match borrowers to lenders willing to offer unsecured loans of $500 to $25,000 with three-year, fully amortizing terms.

The author, Laura Rowley, must have used some old notes because [Read more...]

More Lending Club Quiet Period Announcement Links

This extends my posting on the blog roundup of Lending Club quiet period postings

HollowOak asks: “How far behind is Prosper? Or do they get kudos for having started the SEC filing months ago?

Lazy Man and Money is calling Lending Club dead:

I have been worked for a number of start-up companies and they had one thing in common – they are extremely fragile. A high percentage of new companies fail.. I’ve talked to a few other Lending Club members… and they said they are gone and never coming back. They feel their trust has been violated. With each day that Lending Club can’t or doesn’t say anything to justify this inactivity, the more trust is lost. I might be blowing this out of proportion, but I’d rather err to the side of being conservative until I have reason to believe otherwise.

LazyMan is correct that their inability to communicate this issue over the next few months (?) is going to hurt Lending Club. It was communicated poorly, so I can understand why many people must assume the worst.


ProsperousLand
wondered why he took yesterday off in his catch up post today about Lending Club halting new lenders. Mike had posted previously about Prosper filing with the SEC. RateLadder also posted information on Prosper’s SEC filing. The key line from my perspective from the Prosper filing is: [Read more...]

Lending Club Quiet Period Announcement: A Blog RoundUp

Shhh... Lending Club is Quiet due to SEC Mandate

Shhh... Lending Club is Quiet

I have already commented on Lending Club’s quiet period and referral program suspension. I decided to check other blogs to see what they have to say on the email notice that went out today. Since I was reading everything anyway, I decided to post links and a few quotes to everything that I could find using Google’s Blog Search for Lending Club.


Peer-Lend commented on the uncertainty
of the meaning of the communication:

There has been a large amount of speculation recently in many corners that the P2P Lending models might be subject to some legal uncertainty regarding whether the loans should be classified as securities… The speculation has primarily been concerned with who, in fact, owns the loans (notes), and how exactly that ownership [is transferred]….

It is unclear whether LendingClub has ceased operations as a result of an SEC action or whether LendingClub has chosen to bite the bullet and submit to regulation voluntarily. This event could have major repercussions…

The g-spot posted:

My guess is their legal team is [Read more...]

Lending Club Referral Program is Currently Dead…

the lending club referral program is dead

the lending club referral program is dead

Due to the Lending Club quiet period, the Lending Club referral program has ended. The program was a good one — I earned over $300 in referral fees through this website by blogging about my experience creating a portfolio, creating a video, gathering advice for new lenders, the inception of the referral program and the Lending Club bonus program.

I hope that they bring back the referral program after the quiet period is over.

From the quiet period email sent out today:

Q2. What about referrals?
A2.1 The current referral program is terminated. If you have referred someone who has already signed up as a lender or a borrower, or if you have been referred by someone and have already signed up as a lender or a borrower, you will be receiving your referral payment within the next few days.

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Photo credit: TheTim