Borrowers
Our marketplace facilitates several types of loan products for consumers and
small businesses.
Personal Loans. Our marketplace facilitates unsecured personal loans that can
be used to make major purchases, refinance credit card balances or for other
purposes, at generally lower rates than other alternatives. Personal loans are
offered through both our standard and custom loan programs. Personal loans approved
through our standard loan program include amounts from $1,000 to $35,000, maturities
of three or five years, fixed interest rates, and no prepayment penalties or
fees. These loans must meet certain minimum credit requirements, including a
FICO score of at least 660, satisfactory debt-to-income ratios, 36 months of
credit history and a limited number of credit inquiries in the previous six
months. Personal loans that are approved through the standard loan program are
offered to all investors on our marketplace. Personal loans that fall outside
of the credit criteria for the standard program might qualify under our custom
program and include amounts from $1,000 to $50,000, maturities of two, three,
five or seven years, fixed interest rates and no prepayment penalties or fees.
Education and Patient Finance Loans. We facilitate unsecured education and patient
installment loans and true no-interest loans through Springstone and its issuing
bank partners. Installment loan terms include amounts from $2,000 to $50,000,
maturities from 24 to 84 months, fixed interest rates and no prepayment penalties.
The true no-interest loan terms include amounts ranging from $499 to $32,000
and no required interest payment if the balance is paid in full during the promotional
period, which can be six, 12, 18 or 24 months. There is no prepayment penalty
and borrowers have the flexibility to pay as much or as little, subject to applicable
minimums, of the outstanding balance during the promotional period as they choose.
Education and Patient Finance loans are offered to private investors only and
are not made publicly available on the marketplace.
Small Business Loans and Lines of Credit. In March 2014, we began facilitating
unsecured small business loans, and in October 2015 we began facilitating small
business lines of credit. Both of these loan products are offered through our
marketplace in private transactions with qualified investors. These loan products
enable small business owners to expand their business, purchase equipment or
inventory, or meet other obligations at an affordable rate. Small business loans
and lines of credit are fixed- or variable-rate loans in amounts ranging from
$5,000 to $300,000, with maturities of 3 months to 5 years, and contain no prepayment
penalties or fees. The small business lines of credit allow borrowers to draw
funds in amounts they need, thus reducing their interest cost. Small Business
loans are offered to private investors only and are not made publicly available
on the marketplace.
Investors
Investors have the opportunity to invest in a wide range of loans based on
term and credit characteristics. Personal loans that are approved through the
standard loan program are offered to all investors on our marketplace, while
custom program loans, which include small business, super prime, education and
patient finance, new offerings, and loans that fall outside of the credit criteria
of the standard program, are offered to private investors only and are not made
publicly available on the marketplace. Investors receive monthly cash flow and
attractive risk-adjusted returns. Investors are provided with a borrower’s
proprietary credit grade and access to credit profile data on each approved
loan as well as access to data on each listed loan and all of the historical
performance data for nearly every loan ever invested in through our marketplace.
The marketplace enables broad diversification by allowing distribution of investments
in loans in increments as small as $25.
We attract a wide range of investors, including retail investors, high-net-worth
individuals and family offices, banks and finance companies, insurance companies,
hedge funds, foundations, pension plans and university endowments. We provide
these investors with access to a variety of tools and products that seek to
address their level of sophistication and desired level of interaction, which
can range from low-touch self-directed accounts to high-touch funds and managed
accounts. Investors can invest in loans through one or all of the following
channels:
Notes: We issue notes pursuant to an effective Note Registration Statement.
Investors who meet the applicable financial suitability requirements and have
completed our investor account opening process may purchase unsecured, borrower
payment dependent notes that correspond to payments received on an underlying
standard program loan selected by the investor. When an investor registers with
us, the investor enters into an investor agreement with us that governs the
investor’s purchases of notes. Our note channel is supported by our website
and our investor services group, which provides basic customer support to these
investors.