The platform has been operating since the end of last year but has been in a "soft launch" phase.
Its founder, Wayne Croad, said the model had now been tested. Lending Crowd wanted to develop the platform further and boost its promotional and marketing spend, which is where the extra funding was needed.
Northington Partners has been hired to conduct the capital raising.
Croad said Lending Crowd had 210 active investors on the platform and so far did not have a single loan that had fallen behind in repayments.
It has processed $26 million in loan applications and written just under $3 million in loans.
Croad said about 40% of the platform's lending was to the small-to-medium business market, of firms with up to 20 staff.
He said the rate on offer, of 8.95%, was competitive and meant that applicants would meet credit criteria of mainstream banks.