Peer-to-peer lending service Lending Club has announced a new tie-up with Google to facilitate funding for “eligible Google partners.”

The partnership constitutes a pilot program at launch, so this is clearly an experiment for the time being, but it will effectively entail Google purchasing the loans and paying the interest, with the capital being plowed into its own “partner network to drive business.”

In terms of who Google’s referring to by “eligible” partners, well, it’s ultimately aimed at those using the Google for Work service, covering resellers, consultants, system integrators, and others who help set up and distribute Google apps and services in the enterprise. For now, the Lending Club loans are limited to Google reseller partners in the U.S.

Founded in 2006, the Lending Club has been setting out its stall to transform the traditional banking system, with a focus on efficiency and transparency. Indeed, the credit marketplace bypasses banks altogether.

Those who require a loan apply through Lending Club, which then evaluates their suitability and devises an interest rate accordingly. Those with money to lend, which may include private individuals or organizations, then offer the money at the agreed rate of interest. That’s Lending Club in a nutshell.

So why wouldn’t someone just apply direct to Lending Club, bypassing Google altogether? Well, it seems that it may all come down to available amounts. Lending Club lets you borrow up to $35,000, or $50,000 if you’re a qualified borrower. There’s also a business loan offering that lets companies borrow up to $300,000.

Eligible Google partners, on the other hand, can apply for up to $600,000, repayable over two years. The loans are interest-only in the first year, before switching to a so-called “amortizing” loan in year two, which basically means it’s repaid in equal payments according to a preset schedule.

Google loans

This is a notable move from Google, as it already has direct investment arms — Google Ventures and Google Capital — that take equity from companies it sees promise in. The Lending Club partnership program is different, though, as it provides capital without equity, which can be used for business development and “other growth opportunities.” This may include hiring staff and other expansion initiatives.

Google had previously procured a minority stake in Lending Club, so today’s news may not come as a complete bolt out of the blue. Google doesn’t say whether it will alter the interest rates for its partners from what it agrees on with Lending Club, but we have reached out to the Internet giant for clarification.

Furthermore, this partnership shows that Lending Club is opening up its platform to third-parties, as this model could be used with other partners.

“This first of its kind program enables Google to invest its own capital in the growth of its partners,” said Renaud Laplanche, founder and CEO of Lending Club, in a press release. “This is a new delivery model for financial services; this program opens up many possibilities for Lending Club partners to enable credit for consumers and business owners.”

Today’s news emerges a little more than a month after Lending Club went public on the New York Stock Exchange. Indeed, Lending Club shot up more than 5 percent in the wake of this deal being announced.


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