Former United States President Bill Clinton today announced a partnership between Lending Club and community-based lender Opportunity Fund which will help business development in underserved parts of California.
The pilot program will provide as much as $10 million in loans to small businesses operating in those areas. Opportunity Fund estimates 1,000 jobs will be created.
“Access to capital for entrepreneurs is key to restoring real economic mobility, job creation and the economic health of the middle class,” President Clinton said. “Opportunity Fund and Lending Club are committed to pilot an unprecedented partnership,”
“This is a breakthrough collaboration of high-tech and nonprofit business lending, and it draws on the best of both worlds,” Opportunity Fund CEO Eric Weaver said. “We think this points to the future of responsible business lending, and has the potential to take it to a whole new scale.”
Mr. Weaver said Opportunity Fund will benefit from Lending Club’s technological capability.
“We’ve been lending in disadvantaged communities for 20 years. The plan for this partnership is to allow us to reach many more underserved businesses by developing a first-of-its kind technology integration with Lending Club. We believe that combining a best-in-class community-based lender with the world’s largest online credit marketplace will provide a customer experience that is seamless and will deliver funding quickly to borrowers that are currently shut out.”
According to data from the FDIC, the number of smaller business loans under $100,000 dropped by nine percent between 2007 and 2014. That is a problem when many such business only require between $25,000 and $50,000 in additional capital.
Businesses owned by women and people who are visible minorities have an even harder time borrowing.
Opportunity Fund will access pre-screened applicants directly from Lending Club and will then fund the loans while also advising applicants.