Google is joining with Lending Club to offer funding to businesses that meet the criteria of “eligible Google partners”.
The equity-free loans are currently aimed at those using the Google for Work service, which covers resellers, consultants, system integrators, and others who help set up and distribute Google apps and services in the enterprise. For now, as part of a pilot programme, the loans are only available to US partners, VentureBeat reported.
The scheme will allow Google-affiliated businesses to borrow up to to $600,000, repayable over two years, while Lending Club’s own business loan option only allows companies to take up to $300,000. In the first year the loans are interest free, and then can be repaid in equal payments according to preset schedule in the second. The partnership effectively involves Google purchasing the loans and paying the interest, so that the capital can be plowed into its own “partner network to drive business.”
Google already has direct investment arms in Google Ventures and Google Capital, but this latest offering allows businesses capital without relinquishing equity, to be used for business development.
“This first of its kind programme enables Google to invest its own capital in the growth of its partners,” said Lending Club CEO and founder Renaud Laplanche in a release. “This is a new delivery model for financial services; this programme opens up many possibilities for Lending Club partners to enable credit for consumers and business owners.”
Google took a minority stake in Lending Club in 2013, so the partnership is no surprise, but Lending Club’s move could see the peer-to-peer lender creating similar schemes with other companies hoping to funnel capital to their business partners.
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