Although I appreciate seeing so many approved loans in each note drop, I can't help but wonder what the effect is on the borrowers of waiting as much as 13 days to see their loans get offered for funding. Unless you check the submit date under complete loan details you won't know the submit date, which btw doesn't always coincide with the "days" number. By the time we see the loan appear, the borrower may not still want it, so being approved by LC doesn't mean we're as much more likely to see our notes issued as we think. Any comments?
You are assuming that borrowers are waiting 12 days for their loans to be funded, issued and funds sent to borrower. It is possible that LC already approved and issued the loan, and sent funds to the borrower. And, now offering the loan on its platform to retail and institutional investors. Think of the process as two distinct parts: first part - loan applied and funds issued to borrower, and second part - loan fractionalized and corresponding notes being issued to investors (fractionalization, reverse of securitization).
Aha! Thanks, Anil. LC actually sending them the money first never occurred to me!
Well, I'd technically think it would be Webbank
You're right of course. Thanks, sorry!
Most payment dates to lenders are not same as note issue dates so I don't see any relationship between when notes are issued and when payments are received. IIRC, first two weeks of interest goes to Web bank any way. LC has wherewithal now to fill any gap temporarily between borrowing and lending.
With recent proposed changes in Web Bank having some ownership of the loan, I expect there will be more disjointed process between loan being issued to borrower and note being issued to lender. Supreme Court asked DOJ for opinion on Madden case so I expect more changes to come in the future. IMO, the lending and borrowing process is not as simple as it used to be few years ago.
It doesn't make sense to me that LC would fund the loans before investors have. That has the potential to leave LC holding the bag on a lot of partial loans if investors don't pick them up fully. Is there evidence that this is happening?
Jenn
I think it is the only explanation for LC being in the red.
What happens when the loan is not fully funded? LC will just fund the loan? Then they become like a balance sheet lender. This certainly is not good for your stock valuation.
Here are words from the latest LC 10K SEC filing, which describe the sequence of events.