I first wrote about Peerform over three years ago. They had just launched and were looking to be the number three platform in the industry. But they failed to gain much traction and never established themselves as a viable platform.
But CEO and co-founder Mikael Rapaport clearly does not give up easily. Even though he never attracted the equity funding needed, he never closed his operation. And every few months he would contact me to reassure me that Peerform was still operational and one day they would get some momentum again.
Apparently that day has now arrived. Last month they closed on a new $1 million angel round and they now have a new Chairman, Gregg Schoenberg. I talked with both Rapaport and Schoenberg last month about the reborn Peerform.
Allowing Borrowers Down to a 600 FICO Score
This is the really interesting thing about Peerform now. They have created a new underwriting model that assesses risk in very different ways to Lending Club and Prosper. They call this approach the Peerform Loan Analyzer.
According to Rapaport their underwriting model will take a more holistic approach to assessing risk. Rather than having a strict 660 FICO score cutoff they believe that there are creditworthy borrowers all the way down to a 600 score.
“A borrower with a 620 FICO score does not necessarily mean they are riskier than someone with a 660 FICO,” said Rapaport when I spoke with him recently. “FICO score is not the best measurement for risk anymore.”