Despite a mountain of pressure facing Lending Club (NYSE: LC)’s revenues and profitability in recent quarters, the online marketplace reversed course today, launching a new offering in a bid to help spark its business, taking shape in the form of an auto refinance product, per a Lending Club statement.
Lending Club currently is one of the largest marketplaces between borrowers and investors. Its latest offering is a nod to investors and shareholders after the group had shown lackluster metrics in multiple quarters.
Since appointing Scott Sanborn as its CEO back in June, Lending Club’s fortunes have largely stagnated, which has seen the loss of jobs, multiple new appointments to fill voids, and uneven shareprices. However, the Lending Club’s latest offering may prove to be a boon for the company, catering to car owners in need of a simplified solution to save money on their auto loans.
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The decision to enter into the auto financing sector also reflects the fact that in the United States it is a more than trillion dollar business. In launching its new product, Lending Club is slated to become the country’s largest platform for personal loans.
The act of entering into such a large and extant market is also being billed as a potential panacea for Lending Club’s operations, which are in need of an upbeat quarter. Such efforts will also be instrumental in raising its shareprices further heading into year end.
According to Scott Sanborn, Lending Club’s President and CEO, in a recent statement on the product: “Tens of millions of Americans borrow over half a trillion dollars every year to buy cars. The practices and processes of the auto lending industry offer consumers limited options and a lack of transparency. This has created a gap between the rates consumers pay and the rates they might otherwise qualify for, unnecessarily driving up debt burdens.”
“This is Lending Club’s first offering of access to a secured loan with an overall risk and return profile that’s complementary to the unsecured loans available through our platform. It’s a big step in the evolution of our platform, a win for consumers, and will give our investors access to another proven asset,” Sanborn added.