Alibaba eschews bank financing in favour of Lending Club tie-up
03 February 2015 | 9595 views | 3
E-commerce conglomerate Alibaba has snubbed the banking industry and struck an exclusive deal with US peer-to-peer loan outfit Lending Club to offer financing to US businesses looking to buy from Chinese suppliers.
Under the agreement, a US-based small business can apply in under five minutes and obtain a line of credit from $5,000 to $300,000 to make a payment to a supplier for purchases on Alibaba.com.
Lending Club's P2P platform matches small business borrowers with lenders, offering better rates than those provided by traditional bank financing arrangements and a fraction of the costs for credit card transactions. It was also found to offer a better and more streamlined process for buyers than a typical bank-provided credit line.
Michael Lee, Alibaba.com's global marketing and business development director, says: "Our mission is to make it easy to do business anywhere. We want to make financing as efficient as possible for the millions of US buyers that do business through Alibaba.com and are pleased to bring Lending Club's simple, low cost and transparent financing products to our US buyers."
In the seven years since its inception, Lending Club has originated more than $6 billion in loans through its platform for up to 400,000 US businesses.
The company, which saw its share price soar on a successful IPO in December, struck a similar deal with Google last month to offer loans to the Web giant's partner firms.