LendingClub Corporation (LC): history, ownership, mission, how it works & makes money (2024)

A Brief History of LendingClub Corporation (LC)

LendingClub Corporation is a peer-to-peer lending company that was founded in 2006. It was the first peer-to-peer lending company to register its offerings as securities with the Securities and Exchange Commission (SEC) and to offer loan trading on a secondary market. Here are some key milestones in the company's history:

• 2006: LendingClub is founded by Renaud Laplanche and Soul Htite.
• 2007: The company launches its platform, connecting borrowers with investors who fund their loans.
• 2008: LendingClub surpasses $100 million in loans issued.
• 2012: The company becomes the first peer-to-peer lender to go public, with its IPO on the New York Stock Exchange.
• 2014: LendingClub surpasses $5 billion in loans issued.
• 2016: The company faces a scandal when its CEO, Renaud Laplanche, resigns amid allegations of loan irregularities.
• 2018: LendingClub announces its acquisition of online business lender Radius Bank for $185 million.
• 2020: The company sees a surge in loan demand during the COVID-19 pandemic, as consumers seek relief during economic downturn.

Who Owns LendingClub Corporation (LC)

LendingClub Corporation (LC) is a publicly traded company, which means that it is owned by shareholders who purchase its stock through various stock exchanges. As of October 2021, some of the largest institutional holders of LendingClub Corporation stock include:

• Vanguard Group: Vanguard is one of the largest asset management companies in the world and holds a significant portion of LendingClub Corporation's stock.
• BlackRock: Another major player in the asset management industry, BlackRock also owns a substantial amount of LendingClub Corporation stock.
• State Street Corporation: State Street Corporation is a financial services company that is among the top institutional holders of LendingClub Corporation stock.
• Dimensional Fund Advisors: Dimensional Fund Advisors is an investment firm known for its quantitative investing approach and is a significant shareholder in LendingClub Corporation.

In addition to these institutional investors, there are also individual shareholders who own stock in LendingClub Corporation. These individual shareholders can include company executives, employees, and other retail investors who have purchased shares of the company on the stock market.

LendingClub Corporation (LC) Mission Statement

LendingClub Corporation's mission is to transform the banking system into a transparent, and customer-friendly marketplace that connects borrowers and investors, helping them achieve their financial goals.

Key components of LendingClub Corporation's mission include:

• Transparency: LendingClub is committed to providing clear and concise information to both borrowers and investors, ensuring that all parties have a full understanding of the terms and conditions of their loans or investments.
• Customer-Friendly Marketplace: LendingClub aims to create a platform that is easy to use and navigate for both borrowers and investors, making the borrowing and investing process simple and hassle-free.
• Connecting Borrowers and Investors: LendingClub's mission is to bring borrowers and investors together in a way that benefits both parties, providing borrowers with access to affordable loans and allowing investors to earn attractive returns on their investments.
• Financial Goals: LendingClub is dedicated to helping borrowers achieve their financial goals, whether that's consolidating debt, funding a major purchase, or starting a business. By connecting borrowers with investors, LendingClub helps individuals take control of their financial future.

How LendingClub Corporation (LC) Works

LendingClub Corporation (LC) is a peer-to-peer lending company that connects borrowers with investors looking to lend money for a return. Here's how the company works:

• Borrower Application: Individuals looking for personal loans can apply for a loan through LendingClub's website. Borrowers provide information about their credit history, income, and the purpose of the loan.
• Loan Approval: LendingClub evaluates the borrower's creditworthiness and assigns a grade to the loan based on risk. Investors can then choose to fund all or part of the loan based on the grade assigned.
• Investor Participation: Investors can browse through available loans on LendingClub's platform and choose which ones to fund. Investors can diversify their portfolio by funding multiple loans to spread out the risk.
• Loan Funding: Once a borrower's loan request is fully funded by investors, the funds are deposited into the borrower's account. Borrowers make monthly payments on the loan, which are then distributed to the investors.
• Return on Investment: Investors receive monthly payments from borrowers, which include both principal and interest. Investors can earn a return on their investment based on the interest rates of the loans they have funded.

How LendingClub Corporation (LC) Makes Money

LendingClub Corporation (LC) is a peer-to-peer lending platform that connects borrowers with investors looking to lend money for interest payments. The company generates revenue through various channels, including:

• Interest on Loans: LendingClub earns money by charging borrowers an interest rate on the loans they receive. The interest rates vary depending on the creditworthiness of the borrower, with higher rates for riskier borrowers.
• Origination Fees: LendingClub charges borrowers an origination fee when they take out a loan. This fee is a percentage of the total loan amount and helps cover the company's operational costs.
• Service Fees: LendingClub also charges investors a service fee for managing their investments on the platform. This fee is typically a percentage of the interest income earned by the investor.
• Loan Servicing Fees: LendingClub earns money by servicing the loans on its platform. This includes collecting payments from borrowers, managing delinquent accounts, and distributing payments to investors.
• Gain on Loan Sales: LendingClub may also sell loans to institutional investors or other financial institutions at a premium, generating a gain on the sale of the loan.