Tuesday, May 19, 2009

IOU Central Launching in USA

Note: IOU Central was not available for comment, due to the SEC’s “quiet period” though they have been contacted for comment.

Look out Lending Club, Pertuity Direct and Prosper, Canada’s IOU Central is on its way to America.

IOU Central filed a registration statement with the SEC on May 13th in which they seek to “register the offer and sale of up to $225,000,000 in aggregate principal amount of Borrower Payment Dependent Notes.” The notes are to be offered on a continuous basis following the effective date of the registration statement.

According to the company’s press release notes “will be issued in series and the proceeds from the sale of each series of notes will be designated by the registered lenders who purchased the series of notes to fund an unsecured consumer loan originated through the IOU Central loan marketplace to a registered borrower.”

IOU Central first made news by becoming the first p2p lending company in Canada in February 2008. They were only open a couple of weeks before they halted operations to 'resolve a regulatory matter'. We are still waiting for the first p2p lending company to open in Canada. Right now the most likely contender is CommunityLend.

IOU Central purchased a P2P lending startup from Denmark called Fairrates. Fairrates was built in 10 months by Arkadiusz Hajduk and opened in April 2007. They had lenders willing to invest but had a problem finding and vetting good borrowers. In Denmark there is no access to credit history and Fairrates was hit with a couple fraud cases.

After little success in Canada, IOU Central will try its luck in the United States. Prospective borrowers and lenders registering on the site receive the following email:

Thank you for your interest in IOU Central!

We are getting ready to release an online marketplace that will revolutionize peer-to-peer lending. Our platform will give borrowers the benefit of a true marketplace that allows for better interest rates. The platform will also give lenders freedom in lending with our real-time bidding system. We will keep you notified of our progress as we register with the Securities and Exchange Commission (SEC).

Thanks for being a part of the IOU Central revolution!

See you soon!
The entire IOU Central team

We love hearing from you, so if you ever have any comments,
questions, feedback, ideas, etc. please don't hesitate to email us at
feedback@ioucentral.com. We have a lot in the works, so visit ioucentral.com

From company news and press releases it appears that IOU Central will have a slightly higher credit score requirement than Pertuity Direct and Lending Club—according to an article on wiseclerk.com, a Equifax score of 670 will be required. Lenders will pay a 1% servicing fee (the same as Lending Club). Borrowers will pay a 2% loan origination fee, and borrowers can request loans of up to $25,000 in two separate loans.

IOU Central is a peer-to-peer lending company. The company’s internet-based loan marketplace enables borrowers to post loan requests and purchase notes from lenders. IOU Central launched in Canada’s Peer to Peer lending space in February 2008, but stopped shortly thereafter due to regulatory conditions. IOU Central is headquartered in Kennesaw, Georgia in the United States.

Jessica Ward is a freelance writer and editor, based in Seattle, WA and writes in the personal finance and microfinance space. You can check out her other work at www.jessicaward.me.


matthew said...

isn't lendingclub's minimum Fico score 600? 670 would make it higher, not lower.

Tom said...

Good catch Matthew. I updated the post.

IOU Central said...

IOU Central has launched a Beta site...


IOU Central is an outlet for small to mid-sized businesses to obtain working capital for many different reasons (purchase inventory, expand, etc.). If you know of any small to mid-sized businesses looking for capital, please send them to IOU Central.

Anonymous said...

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