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Lending Club “Goes Quiet” On Social Lending Temporarily
Social lending site Lending Club has posted a notice on their site and blog yesterday. The notice which I have copied below notes that new loans for the time being will come directly from Lending Club and not from other individuals as they have in the past. In summary, Lending Club works by individuals lending money in groups to other Lending Club members at interest rates determined by their credit score. Check the Lending Club blog for more details.
Could the company be working towards an IPO? My guess is not and that this is a standard process to protect Lending Club as they grow. The term "quiet period" is being used and we hear this period could last as long as three months. I have an email into Lending Club to try to get more details. In any event, we will keep you informed as the situation progresses.
Lending Club has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. We will continue to service all previously funded loans during this period, and lenders will be able to access their accounts, monitor their portfolios, and withdraw available funds without changes.
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.
Until the registration process is completed, the company will undergo a quiet period and will not be able to respond to press and other inquiries about Lending Club or the registration process during that time.
Check out our 3-part social lending series to learn how this new lending option works.