A booming Wall Street business is about to be tested for the first time

The marketplace-lending business has boomed in the post-financial-crisis era, with loan volumes swelling and the leading companies going public.

The growth of the market - which matches borrowers with investors, who purchase the loan ? has in part been predicated on an extended period of low interest rates.

Soon, though, market conditions will change. The Federal Reserve is being tipped to up interest rates in December.

That will create a key test for an industry that has ballooned in an era of low interest rates.

"There's been a huge swath of the marketplace-lending universe that exists because no one can find yield," said Mike Cagney, CEO of online lender SoFi.

'No one can find yield'

Marketplace lenders such as SoFi, CommonBond, Lending Club, On Deck Capital, loanDepot, and a slew of other companies originate new loans and refinancing across asset classes including student debt, mortgages, and personal lending.

Return-hungry investors, such as hedge funds, have plowed into the market, accelerating its growth. Startups in the space generated more than $6.5 billion in loans in the US in 2014, according to BI Intelligence. PwC forecasts the market could grow to $150 billion by 2025.

To be clear, no one expects the Federal Reserve to move with any speed from its current zero-interest-rate policy to an environment where interest rates are at 4% 0r 5%. But each incremental increase in rates will put additional pressure on marketplace lenders, as it will introduce additional competition for investor dollars.

"I think what'll be interesting is what happens when other securities start to yield," Cagney said. "So when I can get paper that's totally liquid, that's yielding in high single digits, do I still have an appetite to buy marketplace loans at high single digits?

"I think what you're going to see is - potentially - a higher cost of funds than purely the rate hike, because you're going to have more competition for yielding paper that you just don't have right now."

We're about to find out.