P2P lending platform Zopa will finance loans for customers of newly launched online mobiler retailer Unshackled.
Customers can fund the purchase of handsets by taking out a finance deal with Zopa. The APRs on launch will range from 9.7 per cent to 24.9 per cent. Customers will also be able to pay off early at no extra cost or make additional payments.
The partnership is Zopa’s first online retail agreement, with its service integrated in to Unshackled.com sales platform using the Zopa API.
Jaidev Janardana, Zopa CEO added: ‘With the majority of consumers getting a bad deal on their mobile phone, partnering with Unshackled means we can offer consumers better, fairer and more transparent deal in financing their phone.’
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).
Canadian P2P Lending company CommunityLend has launched new site: FinanceIt. FinanceIt allows Canadian businesses to provide their own in-house financing directly to their customers. Initially FinanceIt targets home improvement vendors, a line of business in which FinanceIt says Canadians finance 51 cents on every dollar spent.
Features of FinanceIt include:
A complete lending platform, including ID verification, credit review, EFT, and collections
Instant approvals that are valid for 90 days
Automated legal documentation
Works on iPad and other mobile devices
Funds are deposited into our partner’s bank account
No fees of any kind
This is a highly relevant development for p2p lending. If successful, CommunityLend will achieve four goals:
Increase loan demand while at the same time cutting marketing expenses/efforts to reach potential borrowers
The promotion of the loan offers will be in fact done for free by the business that offers the financing for its goods
Build strong business relationships to vendors, which can be broadened should CommunityLend develop more p2p banking products aimed at businesses in the future
Identify borrowers in person (at the store)
While I cannot judge how crucial this is in the Canadian market, it would be very useful in some other markets for p2p lending services to have
Validate the purpose the loan is taken out for
Usually in p2p lending unsecured loans can be used for any purpose the borrower wants. While some sites ask the borrower to describe the loan purpose in the listing this is never tracked or validated for it would be time-consuming and costly – just not worth the effort.
In a financing solution it is obvious what the loan will be used for. How is this information valuable? Communitylend will have very good data on how default rates differ depending on the loan purpose allowing them in mid-term to improve the pricing of the credit risk into the offered interest rate.
I believe this is a major step for p2p lending coming out of a single product niche (unsecured loans) into a broader p2p banking approach. And banks should watch out. Offering financing solutions to businesses is a core product for some banks.
P2P lending marketplaces in other countries should explore if offering loan financing to businesses is a viable route for them to grow too. In fact I know one p2p lending company that already has similar plans in the working and will start financing in 2011. Continue reading →