The year 2014 will certainly go down as the best year in Prosper‘s history. They built on their success of 2013 and created some amazing momentum this past year. As you can see in the chart above Prosper had a record month in both total volume and volume per business day. Not only that but in the third quarter of this year they made a profit for the first time.

The recent numbers speak for themselves. Prosper issued $205 million in new loans in December bringing their 2014 total to just under $1.6 billion. This compares to $60 million in loans last December and “only” $357 million in total loans issued in 2013. That is a staggering 347% year over year loan growth. In the fourth quarter Prosper issued $540 million in new loans, the first time they have issued more than half a billion in loans in a quarter.

After a successful Lending Club IPO the team at Prosper have got to be feeling pretty good about themselves. I am going to have the Prosper CEO, Aaron Vermut, on the Lend Academy Podcast later this month so we can explore some of the stories behind this growth and their plans for the future.

Below are the some of the stats from the December data that Prosper makes available for download to all investors. One interesting point to note last month is that the percentage of 36-month loans was at an all time high. These loans typically carry lower interest rates than 60-month loans, so this resulted in the lowest monthly average interest rate ever.

Average loan size: $13,369
Average dollars issued per business day: $9.3 million
Percentage 36/60 month loans: 69.0%/31.0%
Average interest rate: 14.1%
Percentage of whole loans: 91.5%
Average FICO score: 697

In the short month of November Prosper issued $158 million in new loans. This was down from $177 million in October and on the face of it this seems like a bad result for Prosper with monthly originations down 10.8% month over month.

But as Aaron Vermut, the CEO of Prosper, pointed out to me the total monthly number can provide a misleading picture. How so? I alluded to it in the first sentence of this story. Some months have far fewer business days than other months. The metric that Prosper likes to focus on is average daily origination numbers. This makes sense and is something I used to focus on in my previous businesses. The number of working days each month fluctuates between 19 and 23 depending on the month (taking into account weekends and holidays). So, by including average daily loan originations this provides a more complete picture of what is happening.

For this reason you will see in a new look chart above. I have included a new metric on my Prosper chart: average daily originations. I have taken into account holidays and weekends to provide the number of working days for each month so I can calculate the average daily originations number. As you can see even though the total November originations were down significantly from October the daily average actually went up and it was in fact a record month at Prosper.

November also marked a milestone at Prosper that I wrote about here. After more than eight years of red ink Prosper turned the corner in the third quarter and recorded their first ever quarterly profit as stated in their Form 10-Q.

Below are the key stats I track for November.

Average loan size: $13,260
Average dollars issued per business day: $8.3 million
Percentage 36/60 month loans: 66.9%/33.1%
Average interest rate: 14.8%
Percentage of whole loans: 91.6%
Average FICO score: 699

October was another milestone month at Prosper. With $177 million in new loans they crossed $2 billion in total loans. This comes just six months after crossing $1 billion back in April and keep in mind their first billion took nearly eight years to complete.

The last couple of months Prosper’s growth has slowed somewhat from their breakneck pace a few months back. Their $176.9 million October volume is up from $171.6 million in September, just a 3.1% month over month growth.

As I often do after the end of the month I chatted with Aaron Vermut, the CEO of Prosper, to get some perspective on the numbers and  to see how things are going at Prosper. He said that there was never an intention to keep the fast pace of growth from earlier in the year going. Part of the reason for that rapid growth was the iteration of their credit model – they began making better offers to more targeted borrowers which lead to a large jump in conversion rates.

Cash Positive Four Months in a Row

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Prosper closed September with another solid performance. They issued $171.6 million in loans last month up from $167.6 in August which is a 2.4% increase. While this is the smallest percentage increase since their down month in February I should point out that on a dollars issued per business day basis the increase is 12.7% over August.

While the vast majority of loans are going to the whole loan platform I did regularly see over 200 loans available last month on the fractional platform. While this is far less than Lending Club on any given day at least there are some high yielding loans that are staying on the platform for investors. As of this writing there are 21 loans yielding 15% or more available to investors. There was a time a few months back when every loan of 15% or more was being snapped up in minutes.

Still, I would like to see more emphasis on retail investors from Prosper. They keep saying this is their plan and we are seeing some minor improvements here but more needs to be done to attract new retail dollars to their platform in my opinion.

Below are some of the key stats for last month with most metrics staying very consistent over previous months.

Average loan size: $13,291
Average dollars issued per business day: $8.6 million
Percentage 36/60 month loans: 66.0%/34.0%
Average interest rate: 14.96%
Percentage of whole loans: 90.8%
Average FICO score: 700

Note: If you are wondering about the Lending Club numbers they have unfortunately stopped updating their new loan data in real time. Their latest origination numbers are from the second quarter. You can take a look at these numbers in this post.

When you look at the graph above you can see the kind of year that Prosper is having. Apart from a hiccup in February, they have been firing all cylinders this year with some of the most impressive growth we have seen, at least in this country.

The numbers for August are in and Prosper recorded $167.6 million in news loans issued, an increase of 9% over the previous month and up a staggering 434% from August 2013. In the past 12 months they have issued almost $1.1 billion in new loans. Not even the most optimistic prognosticators would have predicted numbers like this 18 months ago.

Below are some of the key stats for last month. Everything is remaining very consistent and the key metric average dollars issued per day continues to show healthy growth.

Average loan size: $13,236
Average dollars issued per business day: $7.6 million
Percentage 36/60 month loans: 66.3%/33.7%
Average interest rate: 14.93%
Percentage of whole loans: 90.3%
Average FICO score: 700

Note: If you are wondering about the Lending Club numbers they have unfortunately stopped updating their new loan data in real time. Their origination numbers and new loan data for the second quarter were made available last month. I will have a post out shortly digging into their numbers.

Prosper continued their strong year in July with $154 million in new loans issued, up from $146 million in June and just $30 million in July last year. The growth this month slowed to 5.6% month over month which I think is a good thing. It is difficult to grow 20-40% month over month for very long without putting incredible stress on all aspects of operations. But they have certainly had an amazing run since February as you can see in the chart above (the black line is the three-month moving average).

Below are some of the stats from loans issued in July. The average loan size has settled in to what is likely a new normal for Prosper – around $13,000. Their percentage of whole loans versus fractional loans is still a lot higher than I would like to see, I hope to see that number fall as they focus more on retail investors in the coming months.

Average loan size: $12,957
Average dollars issued per business day: $7.0 million
Percentage 36/60 month loans: 66.5%/33.5%
Average interest rate: 15.06%
Percentage of whole loans: 89.9%
Average FICO score: 699

Note: If you are wondering about the Lending Club numbers they have unfortunately stopped updating their new loan data. Their origination numbers and new loan data for the second quarter should be available later this month.

Prosper ended the second quarter very strongly with $146 million in new loans in June, up from $124 million in May. The total loan volume for the second quarter was a very impressive $370 million up from just $73 million in the second quarter of 2013.

The three month moving average (the black line in the chart above) continues to steepen. Prosper’s growth has been very strong the past four months.

Prosper is Now Running at Break-even

I had my regular end of month chat with Aaron Vermut, CEO of Prosper, yesterday and we covered a number of topics. There have been many interesting developments at Prosper lately: [Read more…]