P2P Lending site Prosper.com changed its business model today.
The company announced: ‘Our site has a new look, and we’ve eliminated the auction and simplified our loan process so that we can connect lenders and borrowers more efficiently. Borrowers will receive pre-set rates and lenders cannot be outbid. We hope you’ll appreciate this streamlined and even more prosperous experience.‘
Prosper is still lagging far behind competitor Lendingclub in monthly loan volume funded. While Prosper’s new loan funding process resembles the one of Lending Club more after Prosper did away with the auction it remains to be seen if it will help Prosper to regain market share.
The main problem of Prosper was not the auctions, but high default rates leading to lender churn.
Another change, according to a recent SEC filing, is that Prosper now allows partial funding of loans. Continue reading →
Nooch won Duke’s University Fuqua School of Business Elevator Pitch netting 5,000 US$. Nooch aims to allow anyone to use a smartphone to pay back a friend, settle a bet, or just send a birthday gift in only a few seconds, the startup says.
Not there yet though – for the payout of the prize money a paper cheque was needed.
Communitylend has partnered with Canada’s largest used car site AutoTrader.ca, now offering a car financing option through Communitylend for every listed car.
The option is limited to private listings in Ontario for cars with a sales price of up to 25,000 CAN$.
This is a good partnership for Communitylend as it will profit from increased exposure to potential borrowers.
Trustbuddy AB has acquired the operations of Swedish p2p lending site Loanland effective November 19th. This means that Loanland will not close as reported earlier. Trustbuddy AB is a Swedish company with Norwegian origins. Trustbuddy will continue operations and in mid-term plans to integrate the activities of the service into their own platform. Loanland users were informed that the transfer of the membership agreements does not change anything for them.
Money360 offers a first in p2p lending: To my knowledge they are the first live p2p lending service applying the concept to financing real estate loans.
Loan sizes are much bigger than seen before in p2p lending. Minimum loan amount is 200,000 US$, maximum is 5 million US$. The minimum a lender can invest in an individual loan is upscale too: 50,000 US$. This does fit the target audience though as only accredited investors residing in California can join as lenders.
Loans are secured: Each Lender is listed with an undivided fractional interest on the promissory note and deed of trust.
When the transaction is complete and the loan is closed, Money360 will receive a closing fee of 2% of the loan amount. This fee is paid by the Borrower, typically out of the loan proceeds. Money360 charges the Lenders an annual servicing fee of 1.5% of the loan amount for providing all loan servicing functions.Continue reading →
Yes-secure, a British p2p lending marketplace launched in June 2010, will very soon add a secondary market called Secondary Loan Slice Market.
According to information the company provided P2P-Banking.com, the secondary market will have the following features:
Advantages for Loan slice buyers:
• Loans offered at premium and discount: Lenders are able to buy loan slices from other lenders at a premium or discount to the principal remaining amount. Lenders can invest in quality loan slices which they missed out on earlier.
• Ability to view repayment history: Potential buyers for the loan slices can view detailed information about the borrower repayment history, enabling them to make informed low-risk decisions based on track record of reliable repayments.
• Earn interest from day one: As the existing loans slices can be transferred within a few minutes, they can start earning interest with immediate effect.
• Build a balanced investment portfolio: Lenders can quickly build themselves an active and balanced portfolio by picking and choosing through different markets, rates and terms; this automatically leads to risk-diversification through loan portfolio management.
The advantages for Loan slice sellers:
• Encourages liquidity: Investors can easily generate cash as and when they require by selling their loans slices to other registered members of YES-secure.
• Flexibility: Investors can easily manage their investment portfolio, buying and selling chosen loan slices and fine-tuning their lending portfolio to suit their risk profile.
• Loans sold at premium or discount: Lenders can set a price for their loan slices at rates within +/-10% of the remaining principal amounts of their loans.
It is interesting to see that Yes Secure does not face the regulatory challenges Zopa cites (see: Zopa Rapid Return Secondary Market) or has overcome them.
