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.
Rise of alternative finance could put business bankers’ incumbency at risk from City AM (UK) – Why p2p lending is bad news for banks but good news for the economy.
Investors per Loan on Prosper from Orchard – Around 50% of loans issued at Prosper this year have been whole loans with just one investor.
Is a Peer-to-Peer Loan Right for Your Small Business? from Credit.com – Brendan Ross takes a look at the expansion of p2p into small business lending.
Riding the Wave: The Return Curve at Lending Club & Prosper from LendingMemo – Why new investors need to temper their expectations at Lending Club and Prosper.
Unbundling Trend Allows P2P Lending Services to Challenge Banks from Wiseclerk (video) – Fred Wilson of Union Square Ventures gives a talk at LeWeb discussing disruptive companies like Lending Club, Funding Circle and Auxmoney.
Q & A with Nickel Steamroller – A Look Into What’s to Come from Peer & Social Lending – Nickel Steamroller 2.0 is about to launch and here is an interesting Q&A with Michael Phillips, the founder.
Lending Club Update: Backing Out from Sustainable Life Blog – This Lending Club investor did not have a good experience and is getting out.
IBISWorld Report: P2P Lending Revenues Grew 27.6% in 2013 from Crowdfund Insider – A new report is out looking at the state of p2p lending globally.
P2P Lending: Finally, It’s a Wonderful Life from Fox Business – Good article by Jeff Crowe of Norwest Venture Partners on why p2p lending harkens back to a bygone era.
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.
New platform features – A couple of minor updates at Lending Club this past week.
Borrower buys their own debt – What is to stop a borrower buying their own note and then selling on Folio at a discount?
LC Adjusted Nar Percentages — FolioFN Purchases – Buying In Grace Period notes at a discount to increase returns.
Lending Club Update: Backing Out from Sustainable Life Blog. This Lending Club investor did not have a good experience and is getting out.
Well, perhaps if he had actually diversified, he’d have had a better experience. I mean, 40 notes? Really?
His bankroll was too small to have a seat at this table, a common mistake among would be players.
$25 X 500 or 1000 loans ~ $12,500 to $25,000 minimun.
Yes, anyone who puts $1,000 into Lending Club or Prosper and calls it a valid test is simply wrong. Luck will play too strong a role. I think a minimum is 200 notes @ $25 each but preferably more than that.
The author does acknowledge this fact in the article, that he should have had more money in there to perform a valid test.
For $1000, he could have purchased seasoned notes. All his defaults happened during the “Peak Period” when notes get to be 10-12 months old. Personally, I would have looked for notes with about 20 payments remaining (right around $15 ea). More notes…….Less capital risk in each note.
In any case, you can’t go 3-months without checking your account.
Is a Peer-to-Peer Loan Right for Your Small Business? from Credit.com – Brendan Ross takes a look at the expansion of p2p into small business lending.
This is not an article about p2p lending. Quarterspot is (yet) another business loan site like IOUCentral et al. High rates, daily repayment, etc. I’ll assume that Mr. Ross is affiliated with a company that buys the loans from these sites (presumably a private fund run by Mr Ross who has several different companies he’s marketing or a principal of in his ‘bylines’ around the web). Even if they were ‘peers’ to the small businesses that take out the loans, the investors in this underlying fund are accredited. They invest through a fund; they do not evaluate or pick the underlying investments. This model is about as close to peer to peer lending as any hedge fund. In fact, if you think this is a P2P model, I’d argue so is an equity investment in a regional bank.
I don’t know Mr. Ross outside of publicly available information and his connections to your site and a comment exchange we had on another post. I definitely don’t know if he’s a good guy or a bad guy (I’ll presume he’s a good guy) but I thought I’d submit this comment since I felt cheated of my time and attention when I clicked through to discover what I thought was going to be new and interesting info about P2P was in reality another pitch for basic small business loans.
In short: show me the peerage!
dontvote
I haven’t read the piece, but let me just say that a couple of years ago Peter & I had a somewhat spirited discussion right here about what he chooses to include in the weekly roundups. The result of that discussion was that he changed the wording in the intro from “the best news items & blog posts” to the current ” the most interesting news items & blog posts”.
May I respectfully suggest that we give him a lot of latitude in determining what, to him, is “the most interesting”.
Yes, I agree there is not much “peer to peer” about Quarterspot, IOU Central or many of the other online small business lenders. They should really be called online lenders because that is more accurate. Unfortunately, there are zero options today for non-accredited individual investors looking to invest in small business loans. Hopefully, that will change in 2014. But I know several readers (accredited investors) who are investing today in small business loans through these small business platforms via Brendan’s fund and other vehicles.
My major criteria for including an article in this roundup, as Dan points out, is that I find it interesting and I think some others will as well. While Brendan’s writing tends to be somewhat self-promotional I think this article still had some useful information for people looking to learn more about investing in small business lending.
Dan, I’m sure Peter appreciated you taking him to the mat for that pedantic change. Obviously Peter is able to include whatever he wants and because comments are turned on I can, uh, comment on it. Peter is a smart guy who probably wants to protect the brand of the blog he’s worked hard to build. This link is counterproductive to that goal. He included a link to an advertisement as if it was an article with actual information in it. I suggest you read it and tell me if you still think it’s isn’t worth calling him on it. It has nothing to do with P2P lending, it is inaccurate, it tries to ‘leverage’ (if I may) the terms ‘p2p’, ‘big data’, ‘algorithm’ in an effort to sound legit when the real purpose is just to solicit clicks to quarterspot and ioucentral (who he fails to mention in the ‘article’ he has a business relationship with!). I’m not asking for WSJ or NYT level of journalistic integrity here…
Peter, I’ve registered my criticism. I hope you take it in the spirit intended which is constructive. You seem like you have some integrity and thought you may want to defend or reinforce that rep. And linking to credit.com? Maybe next time an about.com article?
Your criticism is noted. As I said above I felt that the article was of interest to those investors looking at the small business space. It was not peer to peer, I acknowledge that, but this blog is expanding beyond a pure focus on p2p.