Peer to Peer Lending News Roundup – August 9, 2014

During the week I share the latest p2p lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here.

How a Personal Loan Can Help You Beat the Post-Grad Plateau from SoFi – Very interesting to see the student loan platform, SoFi, expanding into consumer loans.

International P2P Lending Services – Loan Volumes July 2014 from Wiseclerk – The numbers for July are in for the major European p2p lenders.

Guest Post: Statistics and Emotions in Selling Lending Club Notes from PeerCube – Tracking FICO score can be a very useful tool for investors.

European Platform Analysis: Bondora & Disposable Income from Orchard – A deep dive into European cross-border p2p lending platform Bondora.

RateSetter Claims “Largest P2P Lender in UK”; Raising £25 Million in July from Crowdfund Insider – RateSetter in the UK is on a great run with the most originations of any UK platform in July.

Why Small-Business Lending Is Not Recovering from Harvard Business School – Former head of the SBA, Karen Mills, on why small business lending is stagnating.

Prosper leases bigger HQ in San Francisco’s SoMa from San Francisco Business Times – Prosper is upsizing to a much bigger facility soon.

July 2014 Marketplace Lending Index Returns from Orchard – Orchard benchmarks combined returns for Lending Club and Prosper against other investments.

Learn how to calculate your p2p lending returns with XIRR from Peer & Social Lending – Useful video showing investors how to use the Excel function XIRR() to calculate returns.

Ablrate Now Offers Aircraft Asset Based P2P Lending from Crowdfund Insider – Yet another niche market emerges for marketplace lending.

6 Signs You Might Be a Seasoned Peer to Peer Investor from LendingMemo – How a typical long time p2p investor views this asset class.

The Promise of Peer Finance from Thomson Reuters – How we are evolving as an industry as demonstrated by the growth of the major platforms.

From the Lend Academy Forum

The Lend Academy forum is where investors go to discuss p2p lending. Below are some topics that were being discussed this week.

Why Small-Business Lending Is Not Recovering – Interesting discussion of the article by Karen Mills, mentioned above, on the state of small business lending.

PayPal Working Capital – More discussion on small business lending prompted by Paypal’s new offering.

Yield To Maturity – The Most important? – For investors buying and holding loans on Folio what is the most important factor to consider?

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Brendan Ross
Aug. 13, 2014 8:18 pm

Re: Why Small-Business Lending Is Not Recovering

This was a great piece which more concisely reiterated the themes from the Cleveland Fed article from last August.

Karen deserves kudos for not pussy-footing around the regulatory burden issue. The fact is that every time a bank “tightens” its balance sheet, a small business doesn’t get a loan. After all, what else would banks cut?

Of course this dynamic has proven extremely profitable for alternative small business platform lenders and the end investors – such as my Fund – that buy and hold the loans.

One of Karen’s most important conclusions is that small business lending by traditional banks is not going to recover. In any credit investment, investors need to understand whether the investment is a Trade that will persist only a short while, or a Secular Trend that will have a longer life.

Fortunately, both small business lending and marketplace lending in general are part of a Secular Trend that will continue to gain momentum, and I expect that pressure on yield will be modest and risk-adjusted profits high for some time to come.