U-Haul Does P2CLending – Issues Own Notes

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A new twist to peer-to-company lending. So far p2p lending marketplaces facilitated lending from the crowd to other companies now U-Haul has its own p2p marketplace called U-Haul Investors Club. There anybody can purchase collateralized debt security notes issued by Amerco (the parent company of U-Haul). The minimum deposit required to start investing is 100 US$.

The loans are backed by collateral. Typical interest rates range from 3 to 7%. In the time since the opening of the U-Haul Investors Club in February 2011 approx. 7 million US$ in equipment financing was raised.

(via SocialLending.net – read more in Peter’s article here).

Crowdfunding via Starbucks

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Starting next weeks Americans can help to jump-start the economy sipping coffee at Starbucks. By donating 5 US$ they help to fund community loans to community businesses—including small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing— all across the country committed to creating and sustaining jobs. Donors who contribute $5 or more will receive a red, white, and blue wristband with the message “Indivisible.”

The initiative is called Create Jobs for USA. Loans will be given out by the Opportunity Finance Network (OFN), which represents a nationwide network of 180 Community Development Financial Institutions (CDFIs) set up to provide financing to community businesses in underserved markets where accessing credit through traditional lending institutions is challenging or not available. The Create Jobs for USA Fund at OFN will be seeded with a $5 million contribution from the Starbucks Foundation.

The donations to “Create Jobs for USA” will not be loaned to the CDFIs. They will be turned into equity that can be leveraged. If that equity can be leveraged 7 to 1, that would result in 350 million US$ loan funding, if Starbucks customers donate 50 million US$.

Smava Raises 4 Million; Gets Share in Prestiamoci

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German p2p lending service Smava has raised 4 million Euro in a new round. New investor in this round is the largest Italian private bank “Banca Sella”. Smava also joins in on Italian p2p lending service Prestiamoci saying that Smava aims to grow to a leading European p2p lending service.

This is actually the second start Smava undertakes for European expansion. Smava Poland was merged after a rather short time in operation with another Polish service.

After this round VC Earlybird holds 54%, VC Neuhaus Partner holds 20%, Banca Sella holds 10% and the founder team holds 4% of Smava shartes.

In its press release Smava stresses its successful growth. However in the past year Smava had to deal with a significant decline in new loan volume funded per month.

Pretdunion Gains Banking License And Raises Funding

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It is a successful autumn for French p2p lending service Prêt d’Union. After two years of work, Prêt d’Union was granted a banking license by the French authority. Prêt d’Union also raised a second financing round for 3.8 million Euro (approx. 5.2 million US$) from Crédit Mutuel Arkea and Kimaventures and others. The total funding raised is now 4.8 million Euro.

“The funds raised are for marketing, software development and operating costs. Note that we have dedicated 2.2 million Euro for the approval of the Bank of France to be recognized as an institution credit, such as Cetelem or Sofinco, “said Charles Egly, CEO of Prêt d’Union (statement originally in French, translated).

See a video interview with founder Charles Egly on Frenchweb.

Offering p2p loans for 36, 48 and 60 month loan terms the company aims to reach a 0.1% market share of  the consumer credit market in France.

Update: Lending on Prêt d’Union is restricted to lenders that have ‘accredited investor’ status (this excludes the majority of population).

RateSetter Finishes Successful First Year

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In England p2p lending service RateSetter celebrated it’s first year in business anniversary a few days ago. The loan volume matched is close to 9 million GBP, spread out over 2.400 loans.RateSetter has currently about 65.000 members.
RateSetter has a rather unique business model in the p2p lending landscape which builds on anonymously matching demand and supply for two loan “products”: 36-month loans and rolling loans (the total loan volume is spread nearly 50:50 on these products).

RateSetter says that due to the provisions fund mechanism “every single RateSetter lender has received every single penny of capital and interest that they expected.“. The fund is an instrument set up by RateSetter to “reduce the risk for lenders“. Borrowers pay an amount upfront into the Provision Fund based on their creditworthiness.  Yesterday RateSetter announced that on Sep. 3oth the team managing the Fund decided not to distribute any money from the Fund back to the lenders, which is possible if the team considers the Fund to be excessivly capitalised.

Borrower representative APRs ranged from 7.6% to 11.6%. 79% of borrowers are homeowners. The two purposes car loans and home improvement loans were given for more than 50% of the loans. In the last six month, interest rates for 36 months loans on RateSetter have been falling, whereas the rates for the rolling loans remained mostly at the same level.

RateSetter is a founding member of the Peer-to-Peer Finance Association (see: ‘Peer-to-Peer Finance Association Founded by British P2P Lending Services‘).


(Source: RateSetter)

Get Rid of Banks and Replace Them With P2P Lending?

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That’s a bid radical for me – and I would never demand that. But that’s the tenor of the paper ‘Get rid of banks and build a modern financial world!‘ by Richard Lenz.

He argues:

… This trend must now be continued in regulatory and economic politics: The web-based transferal of capital over Internet platforms will replace conventional banks step-by-step as an intermediary. That the web-based “peer-to-peer lending (P2P)” works successfully is documented by credit-platforms like “smava” in Germany, “Prosper” in the US, and “Zopa” in the UK.
Peer-to-peer lending over a web-based transfer-platform has vital advantages for the “players”:
+ P2P-lending is attractive for the investors (creditor) as well as for the credit user (debtor), because they can share the bank margin, meaning the difference between deposit and loan rates. The platform receives merely a transferal commission. These charges are much lower than the bank margin, because they do not have to finance fancy skyscrap-ers at great locations or bonus payments for investment bankers.
+ The platform only takes over the transferal and does not enter into a contractual posi-tion. Hence, there is no systemic risk, because risks are now peripherally distributed throughout the users.
+ In turn, investors can diversify the default risk by getting involved in various financing projects with small sums or by joining investor groups via the Internet.
+ Money’s undefeatable homogeneity makes it into a product, which is ideally suited for web-based transferals. The advances of information technologies can fully realize its economic benefits here. On the transaction platform, the application of information technologies will clearly increase the transparency, the competition and also the mobility of capital, in comparison to the oligopolistic bank market. Better transparency, increased competition and last but not least, the cessation of bank margins, reduce capital costs and simultaneously simplify accessing capital. From an economic standpoint, these advantages have the potential for a quantum leap within the economic growth of participating market economies.
+ Increased transparency, central processing, and documentation within the transaction platform considerably simplify controlling and supervising finance market transactions. The extensive public resources that have been used for controlling banks so far can now alternately be used to protect investors.