Within the marketplace lending sector, one item that we have reported on numerous occasions is the use of partners and affiliates to provide a funnel of potential borrowers. Marketplace and P2P lenders have been able to attract investors due to offering higher rates of return than those available from traditional fixed income securities. However, attracting borrowers is a tougher proposition as many aren’t aware that non-bank financing solutions even exist. As a result, partners such as SME solutions providers that can promote lending platforms to their clients are in demand.
Among P2P lenders, Lending Club has been one of the most successful at closing partnership with companies with large customer bases. Counted among new partners in 2015 include Alibaba and Citibank.
While those deals focus on providing Lending Club borrower referrals, the firm has announced an initiative to broaden its investor list. Getting launched today is the Lending Club Open Integration (LCOI). The new product is an API that broker-dealers and online advisors can use to integrate on their platforms and websites, Lending Club’s lending marketplace. The net result is that with the integration, broker-dealers and advisors will be able to offer their customer bases the ability to invest directly to borrowers on the platform.
The API can be viewed similarly to Tradier’s brokerage API which allows any trading analysis platform or website to add broker services to their product without having to become a fully licensed broker-dealer themselves. In this regard, the LCOI enables any advisor or broker-dealer to offer P2P lending investments to their customers, without having to operate their own lending marketplace.
Renaud Laplanche, Founder and CEO of Lending Club commented about the product, "Retail investors have always been a key constituency for us. With LCOI, we are making it easy for advisors and broker-dealers to offer Lending Club Notes to their retail clients and deliver a blissful, seamless experience."
