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And here we are… Lending Club is finally available in California! Well, not just California. In fact we went National today, 6 months after the launch of our Facebook application and 3 months after the limited opening of our public website at www.lendingclub.com. In the last 6 months, Lending Club was not available to borrowers in California, Michigan, Illinois, Pennsylvania, Oregon and Nevada, and was only partially available in Texas and Ohio. We did the math: that’s about 108 million more Americans who can now borrow and lend directly among each other and get better rates.

So this is really good news…first, because my neighbor in the quaint town of Los Gatos, CA will finally stop asking “Dude, when can I use your site?” and second, arguably more importantly, because in the current climate of tightening lending practices from the banks, people in every community across America are looking for alternatives to help meet their financial needs, and being available nationwide will help us serve our community better.

As we pointed out last weekend, affinities and connections among Lending Club members get most of the credit for the remarkably low defaults recorded by Lending Club borrowers over the last 6 months. The ability for Facebook users and members of Lending Club’s partner alumni and professional associations to connect across all 50 states will make the Lending Club network even more efficient and help us deliver even more value to both lenders and borrowers.

Better Rates Nationwide. Together.

Renaud from Lending Club

Three questions: CEO Renaud Laplanche

Hi Renaud – What’s the latest news at Lending Club?

After we opened Lending Club beyond its original Facebook environment last month, we started developing partnerships that will extend Lending Club to a variety of existing communities and networks, beginning with three great universities.

Lending Club is available today to Kansas State and Georgia Tech alumni. It will be available in about a month from now to the 420,000 alumni of the University of Michigan. We chose to make this announcement during the homecoming season, which traditionally has marked the return of millions of alumni looking to reconnect and give back to their alma maters across the country.

What is the significance of this announcement?

I believe this is the first time a financial service has combined the member benefits of alumni associations with the social interaction and viral nature of a social network (sorry, I mean a social utility) like Facebook.

Whether they become Lending Club members through Facebook or via their alumni association websites, our friends the K-State Wildcats, the Georgia Tech Yellow Jackets and the Michigan Wolverines will be able to lend and borrow money within their respective trusted alumni communities.

What makes alumni relationships relevant for lending and borrowing?

Person-to-person lending grows faster when a level of trust exists between borrowers and lenders. Adding in whole communities of alumni with that trust built in dramatically increases our ability to extend great opportunities to everyone on the platform.

Potential lenders feel closer to their fellow alumni than they do to the general public: they feel both a desire to help and a stronger sense of trust due to their shared connection. If you can make a 12% return (which is the current average of all lenders’ portfolios on Lending Club), and at the same time help fellow alumni, it becomes a no-brainer for lenders.

Borrowers also feel more compelled to make payments on time because they know that their lenders are fellow alumni who are counting on these payments. This keeps defaults minimal and, in turn, reinforces trust on the lenders’ side. You can expect more announcements on this blog shortly as new online communities join the Lending Club ecosystem every week.

This is it. The great moment we have been working towards: expanding Lending Club beyond Facebook and making it available to anyone out there looking for better rates. We continue to enhance and support our Lending Club application in Facebook, but now, users don't have to be in Facebook to use our site.

As part of our public launch, we are unveiling new features that will benefit the whole p2p lending community, whether you are a Facebook user or not.

Here are some of the features we are proud to present:

Discover your connections: Lenders can now see how borrowers are connected to them, on an anonymous basis. Do they share a workplace, alma mater, association, hometown, or location? If so, LendingMatch™ accounts for connectedness among members to create diversified portfolios with higher levels of connections.

Invite your contacts, add more connections: We have enhanced our referral program to allow users to upload contacts from their Hotmail, Yahoo!, Gmail and AOL Webmail accounts. The more people you add, the more money you make ($5 per contact who signs up), and the better our Lending Club community becomes.

Better Search: Lenders have more ways to find the loans that will really interest them: type a user screen name, a college, workplace, city, hometown, association or any other keyword of interest to you that may be contained within loan descriptions.

Borrower's Account: Borrowers will now see additional information about their loan listings. Once the loan has been issued, borrowers can track their payment history and other relevant information.

Take Partial Funding and Relist: Did you not get all the funds you asked for? Not to worry. Borrowers can now take any partial funding received upon the expiration of the loan request. Would you rather try again instead of accepting the partial amount? Borrowers can also relist their loans within 45 days of their original loan application, and they can update the loan title and description to make the loan more appealing to prospective lenders.

You will also notice our improved home page and navigation. Take a look at new data we have on our communities’ performance, top lenders, rate comparisons, and more. You can now see where our lenders and borrowers are on the map.

Continue sending your comments, questions and recommendations. We love to hear them.

Lending Club launched on Facebook approximately 100 days ago and has just surpassed the $1 million dollar loan mark.

As the first financial service to ever launch on a social network, and one of a handful of Day 1 Facebook applications, we are pleased to see that Facebook has more than doubled its active user base to 40 million and that there are now 4,000 Facebook applications. We checked in with Facebook on our progress and are appreciative of their continued support:

“Facebook Platform was designed to enable innovative business opportunities for all application developers. We're pleased to see Lending Club, one of the first Facebook applications, leveraging the social graph to build a successful business around Facebook Platform.”

Dave Morin, Senior Platform Manager for Facebook

During this credit crunch, we have received a few questions about the credit quality of our borrowers. Lending Club borrowers all have prime credit due to our requirement for a minimum FICO score of 640. Our experience to date shows the value of prime borrowers, as our average FICO score on issued loans is 704 and we have not had any defaults on qualified loans.

From an interest rate perspective, our average interest rate is just over 11%.

We are still seeing a considerable amount of bicoastal activity, with California leading the lending states and Florida leading the borrowing states.

Prior to Norwest, Jeff served as President, COO and board member of DoveBid, Inc., a privately held business auction firm, which expanded during his tenure via internal growth and acquisition from a $10M revenue run rate to a $120M revenue run rate with 400 employees. From 1990 to 1999, Jeff was co-founder, President, CEO and Board member of Edify Corporation, a venture backed enterprise software company focused on voice and internet e-commerce platforms and applications. Edify held its IPO in 1996 and was sold to S1 Corporation in 1999.

1. Jeff, how do you think p2p lending will change the face of consumer lending?

Person-to-person (p2p) lending will be an important driver of change in the world of consumer lending, because the economic model of p2p lending is significantly more efficient than the traditional business models of banks, credit card companies and other institutional lenders. That improved efficiency enables better interest rates for both individual borrowers and individual lenders when they participate in a p2p lending transaction. So as awareness grows among consumers that they can both borrow and lend at more attractive rates, we believe that demand to participate in a p2p lending platform such as Lending Club will explode. Today, the overall markets for consumer lending in the U.S. are enormous, so p2p lending has tremendous room to grow from its current small base before it will seriously impact the operations of large consumer lenders. But you can be sure that banks, credit card companies and other consumer finance companies will be paying very close attention to the growth of the p2p lending category -- they know that they will have to deal with p2p lending more and more as time goes by.

2. Are you a lender or a borrower in Lending Club?

I am a lender on Lending Club. It was a very straightforward and easy experience over the internet. I registered as a lender on Lending Club via Facebook, entered a total amount that I wanted to lend, and decided on an overall risk profile for my loans. Then Lending Club's software automatically generated a potential portfolio of roughly 20 loans and suggested amounts for me to fund for each loan. I had the opportunity to look at each borrower's profile, including their job, income, debt level, credit history and reason for borrowing. From the suggested loan portfolio, I picked out the loans that I wanted to fund, adjusted the amounts that I wanted to fund or stayed with the suggested funding levels, and hit the submit button. It was as simple as that. Lending Club then automatically deducted the funds from my account and set up my account to automatically receive the loan repayments from the borrowers. My current portfolio is yielding over 13% -- a lot better than money market funds.

3. Did the Lending Club deal ruin your summer vacation?

Norwest Venture Partners was very excited to invest in Lending Club, and we wanted to make sure that we kept the investment decision making and due diligence process moving forward in a timely fashion over the course of the summer. I had a long scheduled summer vacation that landed right in the middle of our investment process, but we had to keep going on closing the investment, vacation or not. This meant daily phone calls and emails from our vacation spot. I would not say that it quite ruined the vacation, but I can say that everyone in my extended family now knows Renaud!