There is a lack of hype about "peer to peer lending" in the prospectus for the IPO of US consumer lending challenger Lending Club. In fact, that term is entirely absent from the company's own document.Rather, the lender labels its business as an "online marketplace connecting borrowers and investors."This caution and candour is not reflected in the general media, with the New York Times, for one, sucked up into the misnomer.More accurately, Lending Club can be thought of as a partnership between a technology company with loan servicing expertise and a bank, sitting between borrowers and investors in order to clip a variety of tickets on the way through.Lending Club earns transaction fees on loans issued by WebBank, an FDIC-insured bank with a Utah state charter. WebBank pays Lending Club for technology that applies proprietary risk algorithms, based on the issuing bank's underwriting guidelines, to originate loans and assess loan applicants.To qualify for a loan through Lending Club, borrowers need FICO scores of 640 or higher and clean credit histories, while interest rates average 14 per cent, according to Slate.com. Briefly put, the link between borrowers and investors works like this: once enough investors' funds have been secured via its platform to cover the purchase price of a loan, Lending Club then buys that loan from WebBank. Each investor, in effect, buys a specific share of a specific loan from Lending Club, which is how it distinguishes its funding process from securitisation deals.Lending Club also earns a recurring servicing or management fee from its investors for the subsequent servicing of loans.Quarterly loan volumes reached US$1 billion last quarter and annual revenues are pushing US$200 million.Lending Club has US$66 million in accumulated losses.The prospectus lodged with the US Securities and Exchange Commission disclosed existing major shareholders are a mix of venture capitalists and private equity firms, while the current board and executive team holds 39.5 per cent of the business.The prospectus also names Morgan Stanley, Goldman Sachs and Citigroup as underwriters, although the number of shares to be offered and the initial price have been left blank.