LendingClub CEO On Partnering With Alibaba

Two of the hottest IPO companies last year, LendingClub Corp LC and Alibaba Group Holding Ltd BABA, announced a partnership on Tuesday, which will allow U.S. small businesses to get financing to buy Chinese goods on Alibaba’s platform at a fraction of rates charged by credit card companies.

Renaud Laplanche, LendingClub founder and CEO, was on CNBC to talk about the partnership.

Related Link: Oppenheimer Slashes Alibaba's Price Target

The Deal

“We have been working on this for a few months,” Laplanche said.

“We had the pilot program, we tested things out and so it takes a while to get there, but we are really excited now to have launched the service and production and really allow U.S.-based small businesses to more efficiently in doing the transactions, buy goods from China, buy inventory from China and finance this inventory through LendingClub and then sell goods in the U.S. and pay back the credit.”

“It’s a program that will be really helpful for U.S. businesses.”

What Influence Did Small Business Discussions Have Going Forward?

“We hear a lot about, from small business owners and we have invested a lot in the technology that’s designed to sort of evolve quickly in a way we can roll out new products,” Laplanche said.

He continued, “So, yeah, there was a specific need for short-term financing within three to six month time to finance inventory, turn back that inventory and pay back the loan. And we are able to launch this product and provide a really low-cost financing, starting at 0.5 percent a month.”

“So, very low-cost, flexible terms and terms that are in perfect match with what business owners really need.”