User:EFlynn at LendingClub/LC Biz Model Draft

Past business model
From 2007 through the end of 2020, LendingClub offered a peer-to-peer lending service. Customers who needed personal loans would undergo a screening process that involved a credit check, an evaluation of their credit history, and, in some cases, the vetting of their income or employment data. If the borrower was approved, LendingClub's banking partner would issue the loan, which would transfer ownership to LendingClub. LendingClub would then list the loan on its marketplace. Interest rates on these loans ranged from 6.7 to 35 percent per year, and no loan was larger than $40,000. The company made individuals loans available to its investors, who could choose to fund a portion or all of it, with the possibility to make a return on their investment as the loan was paid back with interest. Almost the entirety of LendingClub's income was generated by origination and servicing fees.

At the end of 2020, LendingClub shuttered its peer-to-peer lending service.

Current business model
As of 2022, the company operates as a marketplace bank. It generates income from origination and servicing fees from loans sold on its marketplace. The company also makes money by holding a portion of loans on its balance sheet and earning interest as those loans are repaid. It continues to offer personal loans to consumers, which are often used to pay off auto or credit card debt.

When LendingClub acquired Radius Bank in February 2021, LendingClub acquired a banking charter and gained the ability to extend loans to customers by itself, without the need to partner with a bank. Through its LCX platform, the company bundles loans and sells them to institutional investors. In 2021, LendingClub sold $8.1 billion worth of loans to institutional investors and kept $1.8 billion of unsecured consumer loans on its balance sheet.

LendingClub also functions as a digital bank, offering traditional banking services such as savings and checking accounts, and certificates of deposit. The bank also offers commercial banking services. As of March 2022, its balance sheet reflected $615 million worth of commercial loans and equipment leases.