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...]

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.

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.

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...]