The Law Office of Lynnette Ariathurai A Professional Corporation

Google business planning incorporates peer-to-peer lending

One should not keep all their eggs in one basket. This saying is pertinent in many aspects of life, especially in business planning. Within a business context, it can be interpreted as stating that diversification is important and can help a company grow and expand into other areas outside of the company's main product or service. Google Inc. has recently put this idea into action by purchasing a significant amount of shares in a new peer-to-peer lending company based in California.

The owner of the search engine Google has recently teamed up with Foundation Capital to purchase $125 million worth of shares in LendingClub Corp. This new startup lending company has already closed approximately $2 billion in fully funded loans. LendingClub's CEO stated that Google was attracted to the firm due to its wide customer base as well as its focus on cutting edge uses of peer-to-peer technology.

LendingClub offers a variety of different types of loans, including education loans, home remodeling and loans used to take vacations. The firm offers loans for up to $35,000 and usually offers interest rates that are more attractive than credit card companies. Approximately 40 percent of the firm's loans have closed within the previous six months.

When making a major transaction such as this one recently made by Google, it is important to incorporate this decision into the overall business planning strategy of the company. It is also important for the California lending company to also create an effective strategy for efficiently using the new investment funds received from Google. However, any good business plan will ensure compliance with all applicable laws and regulations.

Source: Bloomberg, "Google Buys Stake in LendingClub Startup Valued at $1.55 Billion," Dakin Campbell and Ari Levy, May 1, 2013

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