I assume you have a high risk appetite. If there is a downturn situation and lot of loans given out by LC default, then they may suffer heavy losses and go out

I assume you have a high risk appetite. If there is a downturn situation and lot of loans given out by LC default, then they may suffer heavy losses and go out of business. Given that they are not regulated, there is no guarantee on deposits by the Fed so you won't get any money back.