The Empty Loan Marketplace – Lending Club Zero?September 2, 2016 | By: Sean Murray
Update: 9/2/16 – At 1 PM, Lending Club uploaded a batch of 600+ loans on to the platform.
Update: 9/3/16 – The only notes available on the platform today are C-grade notes. No A,B,D,E,F,G…
The leader in marketplace lending is showing ZERO available notes in its retail marketplace, according to a screenshot captured of Lending Club this morning. This indicates that Lending Club either hasn’t uploaded its latest batch or that no loans are currently being allocated to retail investors. It doesn’t mean that the company isn’t lending.
PeerCube, which tracks the amount of new and total loans on the Lending Club platform, also shows zero availability over the span of several hours.
Even if it’s a technical issue, Lending Club’s purported 135,000 self-managed active individual investors will be sure to notice that the marketplace is currently out of stock.
PeerCube also shows that there were 27% fewer loans listed on the retail marketplace in August than in July.
Meanwhile, a thread started on the LendAcademy forum where many Lending Club retail investors hang out, shows users discussing a dearth of new loans going back to July 22nd. Anil Gupta, who runs PeerCube, said in the thread that Lending Club had recently stopped releasing new loans to the retail platform on weekends.
Lending Club has not yet responded to an email sent to them inquiring about the zero note availability, but recently company CEO Scott Sanborn reassured investors that they were committed to the marketplace.
Some of our investors have observed the funding environment and asked: “Are you going to become a balance sheet lender, just like a regular bank? Has Lending Club’s business model changed?”
Let me be very clear: Lending Club is committed to the marketplace model and we do not plan to become a balance sheet or “hybrid” lender. Our mission of connecting borrowers and investors has not changed.
– Scott Sanborn, in an email on 7/28/16
On August 4th, Bloomberg reported that Lending Club was in talks with Western Asset Management Co. to set up a fund that would purchase as much as $1.5 billion of loans over time. Institutions like these may be responsible for the periodic lack of notes made available to the retail market.Last modified: September 3, 2016
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.