Increasingly more online lenders are expecting a recession, Reuters writes. Peer-to-peer and digital lenders came about in large part in response to the Great Recession of 2008, however, as they rely on market funding, it might be a problem during an economic downturn. According to Reuters, a recession could mean escalating credit losses, or a liquidity crunch.
When discussing a possible recession, LendingClub CEO Scott Sanborn said, “This is very top of mind for us. It’s not a question of ‘if,’ it’s ‘when,’ and it’s not five years away.”