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.
More positive news in peer-to-peer lending from Bdaily (UK) – A county in the UK is teaming up with peer to business lender Funding Circle to boost small business lending.
How to Use P2P Lending to Fund Your Retirement from LearnBonds – My guest post about how retirees can potentially use p2p lending to help generate income in retirement.
UK economy: How does peer-to-peer lending work? from BBC Business – Video of a small business in the UK and how Funding Circle has helped them.
Prosper: Best Search Filters for Automated Quick Invest from My Money Blog – New Prosper investor discusses how he decided on his investment strategy.
New Feature: Note Sales from Interest Radar – New feature on the popular Lending Club statistics site to help investors track their trading platform sales.
Lending Club hits hockey-stick growth from Upstart Business Journal – Some more commentary on Lending Club’s $1 billion milestone.
Peer-to-Peer Investing a Bust in Michigan from Free Money Finance – The perspective of a potential Lending Club investor who is not allowed to invest on the retail platform.
Taking a Peek at Peer-to-Peer Lending from TIME – Respected financial blogger, JD Roth, gives his perspective on peer to peer lending in one of the nation’s leading news publications.
The Main Reasons To Borrow Money Through Peer-To-Peer (P2P) Lending from Financial Samurai – Commentary on the different ways borrowers at the p2p lenders use their money.
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.
FOLIOfn Selling Strategy… Flawed? – What kind of notes are buying on the secondary market looking for? Some perspectives from Folio-only investors.
Calling your P2P investments your own business? – Taxes and p2p lending – the perennial discussion.
Finding Blenders – Looking for borrowers on Prosper who are also investors (known as blenders).
I have a general question about Prosper to anyone who can answer:
According to Prosper’s quarterly report, at September 30, 2012, the Company had approximately $8.0 million in available cash and cash equivalents and short term investments. From that same report, Prosper had a net loss of almost 4 million for the quarter ended September 30, 2012. Prosper appears to have increasingly quarterly losses even though quarterly revenues are significantly increasing. Based on this, it seems to me that Prosper will run out of its non restricted cash reserves by sometime around March of next year. I’ve not heard any discussion on how Prosper intends to fund operations beyond that point. Does anyone know if Prosper has or is making plans to raise additional capital for continued operations? It’d sure put my mind to ease knowing that there’s a plan in place.
Dennis, I asked the Prosper management team that very question because I also saw these quarterly results. The conversations I have had were off the record so I can’t share details here, but I can say this. It is clear that Prosper will need another funding round in 2013 and it maintains a good relationship with both existing VC investors as well as new investors looking to enter the space.
Here is my take on this. If you look back at Lending Club’s financials around this same loan volume they also had increasing losses. Lending Club has a high valuation today but they have also proven that this model can work. A VC investor can take an ownership stake in a p2p lending company can do so at Prosper for a substantial discount over Lending Club. Of course, there are no guarantees but because of this I don’t believe that another funding round will be a problem for Prosper.
I don’t know if this has shaken Proper investors’ confidence lately. I see a lot of loans coming out on their pipeline in the past few weeks, to the tune of over 800 as of today, but there aren’t a lot of takers. Loan originations do not seem to be growing at a pace commensurate with loan listings. Perhaps, investors like myself are getting more and more picky: I find few loans that fit my criteria. Regardless, I don’t see the same issue with Lending Club. Their loans get funded fairly quickly, and I have been able to pick up a couple of “good” loans each day.
Is there really any reason to be invested in Prosper right now? I just do not think that the added diversification benefit is worth the risk of Prosper going under. Lending Club seems like a much safer bet.
Andrew,
Saying “No” could become a self-fulfilling prophecy. And you know Peter can’t say that regardless, since he is pretty much the de facto ambassador whose job it is to navigate between the p2p establishment and ordinary investors like you and me. 🙂
And there are some things that I like about Prosper but I cannot say the same for Lending Club. For instance, Prosper’s limiting HR loans to $4000 seems to make better sense than LC letting people with F and G grades borrow up to $35,000.
KC………..I agree with what you & Peter are saying in that it makes a lot of sense to invest in both Prosper & LC loans. In the 3 years that I’ve been investing it’s pretty clear that they both offer complimentary options for investors due to slightly different borrower targeting, or whatever one wants to call it. I don’t see it as an either or choice.
BTW, ambassador or no ambassador…………..under no circumstances am I referring to Peter as “Your Excellency”!
Andrew,
KC is right in that I am a supporter of both Prosper and Lending Club and continue to invest in both. Obviously, where Lending Club is at right now makes it a lower risk investment but I think Prosper is still a worthwhile investment. And diversification is really the key here. Prosper gives investors access to different underwriting standards and different kinds of borrowers. So, I maintain that serious p2p investors should participate in both platforms.