Dating Web Site Seeks P2P Loans Via Virgin Money USA

New York-based dating Web site GetSteady.com is seeking peer to peer loans for growth of its US business operations.

I interviewed its’ founder and President Michael Zuyus via email this week to learn more about the company’s plans for growth and how they are applying peer-to-peer lending to their business plan.

GetSteady.com is a dating web site which caters to the gay, lesbian, bisexual, and transsexual (GLBT) community. The company is seeking loan proposals via Virgin Money’s “Business Builder” product, which is a promissory-note negotiated between the lender and the borrower, and then enforced and managed by Virgin Money USA. GetSteady.com promises interest rates better than traditional investments including savings accounts, CDs and blue-chip stocks.

Mr. Zuyus prefers not to disclose the amount of capital he hopes that this effort will raise, but is seeking minimum loans of $1,000. He has also declined to comment as to if anyone has elected to fund one of these loans.

The company makes an interesting differentiation between peer-to-peer loans as investments. I asked Mr. Zuyus if investors are guaranteed in any way to receive repayment, and he replied “I would like to stress that we do not have investors. If a bank granted my company a loan, they would not be an investor, it’s simply a business loan. In this case, it is a peer business loan.” I found this an interesting re-branding of peer-to-peer loans after hearing the term “investment” thrown around so frequently in reference to peer lending. (I can’t help but wonder if we’ll see this nomenclature adopted more broadly across the industry as a result of regulation?)

I questioned Zuyus about the decision to use peer-to-peer loans in lieu of traditional banking and he cited the recent decline of credibility in the banking community, later saying “Peer to peer lending has become a trusted and viable alternative [to traditional lending], furthering economic growth until banks begin to lend more freely to small business again."

A company press release from June 8, 2009 quotes Zuyus as saying “Using these funds, we aim to expand our marketing and advertising efforts responsibly, quickly capitalizing on the current online dating boom.”

Getsteady.com was founded in 2009 to provide low-cost connections within the GLBT community. The company focuses on serious-minded friendships and relationships based on trust. Members must be verified including their profile photos (Zuyus cites ongoing troubles with users on dating sites supplying false photos).

Jessica Ward is a freelance writer based in the Seattle area. She writes on peer to peer finance, family and more. She also blogs at www.pennywisefamily.blogspot.com.

Uncrunch America Contest for $5,000 0% APR Loan

Uncrunch America is a consortium of peer to peer lending companies including Lending Club for personal loans, Virgin Money for mortgage loans and On Deck Capital for small business loans. Credit Karma and Geezeo are also part of the “Uncrunch” team because of their money management tools.

Uncrunch America formed in January 2009 because of the tightening credit market to educate people about social lending opportunity and available alternative capital sources. This month’s prize is a $5,000 interest-free loan. Participants submit an essay about how they would like to “Uncrunch America” through access to credit.

Participants can enter by submitting a story online and encouraging others to vote for it. Uncrunch America’s stated goal is to “help resolve the credit crunch and rebuild the economy by delivering consumers secure, trustworthy tolls and infrastructure to finance necessary expenses and make critical investments.

About the organization:

Lending Club is a social lending network where members borrow and invest money. Qualifying borrowers can obtain a personal loan of up to $25,000 at fixed interest rates for 3 years with no penalty for early payment. Read more here.

Virgin Money is a financial services pioneer dedicated to improving your overall mortgage experience. Read more here.

On Deck Capital is a direct lender for small businesses unable to obtain traditional funding or that need faster access to capital for unexpected business opportunities.

Credit Karma is a provider of free credit scores and credit improvement resources and tools.

Geezeo is a suite of online personal finance tools with tasks like budgeting.

You can read Tom's earlier post about the launch of the Uncrunch America campaign online here.

Jessica Ward is a freelance writer and blogger from Seattle. She also blogs at http://www.pennywisefamily.blogspot.com/.

Virgin Money joins the Uncrunch America Campaign

Uncrunch America originally attracted attention when it amassed thousands of votes and was a top 10 idea in change.org's campaign to find the top ideas for change in America. The idea gained additional momentum this week as Virgin Money joined competitor Lending Club to help raise awareness about the availability of alternative sources of credit.

Virgin Money facilitates loans through family and friends which is different than Lending Club's model. While loans between people who know each other can be made through Lending Club most of Lending Club's loans are made between people who do not know each other.

In addition to social loans, Virgin Money just entered the traditional mortgage loan market. Virgin Money is approved in 35 US states for both conventional and FHA loans and they expect to be fully licensed by the end of 2009. More than 150 mortgage brokers have joined their network.

Here are the three options presented to visitors at Uncrunch America:

Personal loans - If you have good credit you can now get a personal loan of up to $25,000 funded by fellow members at a fair interest rate through Lending Club. Free membership and easy online application.

Small business loans - If you are a small business and need more than $25,000, On Deck Capital has been actively lending to small, healthy, store front businesses throughout the credit crunch.

Home loans - Traditional Mortgages or Social Mortgages, Virgin Money has creditworthy borrowers covered. Check out our traditional mortgage for fair rates and a fast closing or consider our social mortgage for a great deal if you're borrowing from family.

Virgin Money Enters US Mortgage Market

Some might call Sir Richard Branson crazy. Others call him crazy successful. In his latest US financial adventure, he may be both.

At a time when all the banks are leaving the mortgage market like rats from a sinking ship, Virgin Money USA is jumping in the water. Last year, the UK based Virgin Corporation acquired Lendia, a US mortgage originator and processor and is now offering wholesale mortgages to broker in the USA.



With sales slogans like “Kiss Me I’m Loan-y” and “Loan Brokers Do It Better,” it’s certainly the first mortgage wholesaler I’ve ever noticed. Further proof marketing works I guess, even Virgin’s shocking brand of marketing. Only Virgin can try to make a mortgage sexy.

That said, they shouldn’t need it at all. This is a company that on all levels is famed for customer service and for championing its customers. They’ve actually entered this market due to the lack of service-oriented wholesalers. Asheesh Adveri told the media in a company press release that “Virgin Money sees a growing service gap in the mortgage industry which we plan to close and own.”

They’re offering some innovative features including real time status updates, rate quotes, paperless underwriting, and the ability to import loan applications directly via the broker’s loan origination system—novel and efficient characteristics in this industry that is traditionally slow to innovate.

Virgin Money is already approved in 35 US states for both conventional and FHA loans and they expect to be fully licensed by the end of 2009. More than 150 mortgage brokers have joined their network. For more info see www.virginmoneyus.com.

Jessica Ward is a freelance writer based in Seattle who enjoys writing on business and finance topics as well as humanitarian topics.

P2P lending from family and friends through Virgin Money

Virgin Money out of Waltham, Massachusetts has been in business since 2001--first as Circle Lending, then as Virgin Money in 2007 when Sir Richard Branson (owner, Virgin Records) bought a majority stake in the company. Asheesh Advani, CEO of Virgin Money USA, started his company when he saw a need for the proper management of informal loans between friends and family. And his booming company provides the tools for just that.

Virgin claims to be "pioneers in the social finance sector," and for good reason. Their personal loans have a default rate of 5 percent when most personal loans, without the oversight of a company like Virgin Money, have a default rate of almost three times that (14 percent). In an economy where people with cash to invest are eyeing the stock market with suspicion, where better to invest than in a family member or friend you know and trust, right? Investors are seeing returns of up to 10 percent in the p2p market.

A Friendly Debt?
According to Virgin Money the benefits swing both ways. "Imagine: Aunt Sarah as your mortgage lender!" their site says, promoting the notion of a feel-good relationship between borrower and lender. And from a borrower's perspective, why not send interest payments to your friends and family instead of the bank? If all goes well, this situation is ideal. But the idea of a loan between friends gone bad isn't ignored by Virgin Money. They don't deny the historical tendency for relationships to sour when money is involved. In fact, they claim that with their oversight and financial tools, problems can be avoided in the future, thus sparing borrower and lender from sticky situations and spoiled relationships.

Master to the Lender
From all appearances, Virgin Money provides every tool to make a loan between friends clean, tidy, and professional with terms, interest rates, documents, etc. But what about the notion that a borrower is ultimately master to his lender? It may not be an overt mastery, but an underlying one, nonetheless, and not a characteristic you'd find in many close relationships. Perhaps this distasteful notion could be part of the success of Virgin Money; perhaps it aides in the urgency to pay off a loan sooner and without default. However, money experts such as Dave Ramsey (The Dave Ramsey Show and Lampo Group, Inc.) strongly and loudly discourage lending money to friends and family specifically because borrowers who have been turned away from banks have already been deemed too risky an investment. And he should know. In a financial crisis, Ramsey himself defaulted on a loan for which a cosigner was stuck paying. He goes on to say, "If you truly want to help someone, give money." On the other hand, financial expert, Suze Orman, does not seem as opposed to the idea and provides some tips on her website for making personal loans effective, some of which parallel the tools used by Virgin Money.

There are many things to consider when borrowing or lending money in the budding social financial sector. Companies like Virgin Money address these considerations in a novel way, seeking to take the sting out of borrowing from relatives. Check out their website for more information on their vast array of products.

______

This post was authored by frequent contributor and freelance writer Liz Elden.

P2P Lending on VOA News

Michael Sullivan from VOA News discusses P2P Lending on his radio program.

Much of the program is about Lending Club which, right now, is the leading P2P lending site. There is a discussion about how the current financial crisis is actually good for Lending Club. Prosper, Virgin Money, Zopa and Kiva are also all mentioned.

According to the radio program, Zopa closed due to "difficult lending conditions." Although it is easy to blame the credit crunch in this environment, the much more likely culprit is SEC regulations. Loanio and Prosper are also in a sticky situation right now due to SEC regs.

Fynanz and Simple Tuition featured by Boston Globe

The Boston Globe takes a sharp look at the student loan industry and especially the peer to peer market in today's article Student loan confusion opens market niche.

In addition to Fynanz and Virgin Money, the Boston Globe talks to Kevin Walker, co-founder and chief executive of Simple Tuition, an online service that helps students compare various loan options. Simple Tuition is one of the companies we hope to talk to at FinovateStartup on the 29th.

Here's an excerpt from the Boston Globe article:

So-called peer-to-peer lending companies are also sailing into the student loan fray. Waltham-based Virgin Money (part of Richard Branson's empire) offers to formalize loans between students and their family members for $299. Fynanz Inc., a younger New York start-up, recently began doing the same thing in Massachusetts, though Fynanz allows strangers (perhaps alumni of a school) to make loans to students and earn interest - anywhere from 6 to 10 percent, depending on the borrower's credit score.

But online peer-to-peer lending is still new, and Fynanz has completed one loan since its launch in March. "We don't expect this to be mainstream anytime soon, but I do expect some of the smarter, more involved students to see this as an option," says chief executive Chirag Chaman, an alumnus of Worcester's Clark University.

"It could help a small number of students, but I don't think it's going to solve a national credit crunch," Tony Erwin says of peer-to-peer lending. Erwin is Northeastern University's director of financial aid services. "It's a fine idea, but it's not the fix," he adds.

As long as students and parents are searching for a fix, that creates openings for start-ups.

"It's a really disruptive time in the market," says Stein. "But I really view chaos in a marketplace as a great opportunity."

Related:
Fynanz seeks to fill void in student lending
Fynanz off to a slow start
Fynanz becomes the first P2P student loan marketplace
Interview with founder Chirag Chaman

Prosper's predictive bidding and other startling news

Yesterday Prosper rolled out a new feature - predictive bidding. After mining their database and looking at various clicking patters Prosper has been able to determine with a 90% degree of accuracy if you are going to bid on a loan. In those cases, they will go ahead and bid for you. "In an effort to save our lenders some precious time, we decided that when we observe these patterns (among others), we should just go ahead and place a bid on the lender’s behalf," wrote Andrew Martinez-Fonts. "It’s kind of like a portfolio plan where the main criterion is your excitement level!"

And that's not all - they will soon roll out predictive funds transfers. Martinez-Fonts explains, "If your account ran out of money because of all those predictive bids, don’t worry – we’ll initiate a transfer for a fresh $500. You deserve it."

Meanwhile, on the prospers.org forums there are new developments in the cybersquatting legal challenge against Prosper Report. 112233 writes:

"Apparently they are withdrawing their cybersquatting claims and are in the process of issuing an apology. I should be receiving it by mail in the next couple of days from Prosper's attorney on behalf of John Witchel (I will be receiving a personal call and apology directly from Mr Witchel once the legal side of this is resolved)."

Meanwhile, Prosperousland, in a feat of investigative journalism, discovered Prosper is interfering with presidential politics. Mike reports, "Prosper is intentionally holding back on raising the lending limits and improving collections in Red leaning states to drive them further into economic recession, a condition that favors Democratic candidates in this election cycle."

Not to be outdone, Virgin Money owner Richard Branson teamed up with Google and launched Virgle - a venture dedicated to the establishment of a human settlement on Mars.

Ah, April Fools.

Other great news from around the web yesterday:

YouTube rick rolls users
TechCrunch sues Facebook
Tim Ferriss, the author of The 4-Hour Workweek, revealed that he has outsourced his blog for the last year - I admit, he got me on this one.
Google announces Gmail Custom Time - Be on time. Every time.

Any other great April Fools jokes out there? Did someone get you?

P2P Lending Carnival #4

In June of last year I reviewed the top Prosper blogs. Since then, the number of bloggers covering P2P lending has increased significantly and the content covers much more than just Prosper. I'm proud to host the 4th edition of the P2P Lending Carnival. There are a huge range of articles in this edition including some heavy anti-P2P lending posts. Prosper, Lending Club, Lending Hub (Australia), Kiva, Virgin Money, and IOU Central (Canada) are covered. We have posts from borrowers as well as lenders. So enjoy...this represents the "best of" P2P lending articles over the last 2-3 weeks. Past editions have been hosted by Lazy Man and Money, Brip Blap, and Rateladder.

6 Ways To Manage The Risk of Peer to Peer Lending - This is a post by SVB on the official Prosper Blog. She wants to make the leap into P2P lending and takes a look at how to overcome her risk aversion. She has some great tips. I look forward to following her story as she starts lending.

5 Ways to Help Get a Prosper Loan Funded - Jacob from Early Retirement Extreme has lent out more than $12,000 over the past 18 months and has a few great tips for borrowers.

Is Person to Person Lending Safe? - Cash Money Life responds to reader's questions about the safety of P2P lending. "Just like any other investment," he writes, "you need to do your research to determine the level of risk you are willing to assume and the percentage of your portfolio you are willing to invest."

Peer Lending Lessons From the Dating World - In case you missed it, the CEO of Lending Club, Renaud Laplanche, was interviewed on CNBC's Power Lunch. During the interview, a comparison between P2P lending and dating was made. Money $mart Life discusses the comparison and offers some "peer lending 'dating' tips" of his own.

Get a Better Rate for Your Small Business Loan from Virgin Money - Ben takes a look at the story behind Richard Branson's purchase of Circle Lending and its rebranding into the Virgin Money empire.

Is Peer to-Peer Lending Ready for Prime Time? - Moolanomy considers P2P lending "riskier than the stock market" but thinks there is still the potential to earn money as a lender.

Prosper Taxes and Prosper Taxes: Help Me… Help You - Rateladder and Lazy Man both take a look at the confusing tax situation for the various forms of income and loss including interest, defaulted loans, late fees, referral rewards, collection fees, service fees and group leader rewards.

Prosper vs. Lending Club SmackDown–Who has the best interest rates? - The Dough Roller makes a detailed comparison of the interest rates at Prosper and Lending Club from the borrower's perspective. DR writes, "How they set interest rates is fundamentally different. Prosper follows an EBay auction style format...Lending Club sets the interest rate based on a formula...there is no bidding." DR finally concludes, "Whether you are a borrower or lender, the starting place should be to determine the interest rate you would pay or receive at Lending Club....At present, I suspect that many Prosper lenders are underestimating the risk of default, which results in better interest rates for borrowers at Prosper, and better interest rates for lenders at Lending Club." This is a well researched article and the best comparison I've seen so far. The comments are very good as well. As Don points out in the comments, Prosper uses ScoreX Plus from Experian which differs from the FICO credit score Lending Club uses so a strict comparison can't be made between the two when looking at interest rates. For more Prosper bidding tips take a look at Matt's article about when to bid on a Prosper loan.

7.2M In January Prosper Loans, But How About February? - Mike from Prosperous Land takes a quick look at recent loan stats. He is one of my favorite Prosper bloggers and I'm glad he started posting more often. For a look at two of his articles about recent Prosper drama read Prosper Approaching Nuclear War and Junk Mail Seller Revisited.

Lending Club Loan in Review - LuLu, a college student, borrows money from Lending Club and pays off her Discover Card, Citi Card and consolidates other debts.

IOU Central Launches P2P lending in Canada - WiseClerk, the best site for information about international P2P lending, takes a look at Canada's first P2P lending service.

My Opinions on P2P Lending - Ana rants against P2P lending. "I don’t think P2P lending is a good idea at all, not only for philosophical reasons but also for practical reasons," she writes. She feels these sites encourage unhealthy debt and would even avoid being a lender to avoid the ethical dilemma of "slapping those chains of debt onto another person."

Why I Started Lending Money With Prosper And Lending Club - After seeing the rates drop on his high yield ING savings account, David from My Two Dollars is turning to P2P lending.

Peer to Peer Lending: Neat Idea, Bad Investment - Adfecto thinks that bonds or the stock market are better investment options due to high default rates. He says, "I started out very excited and the more I learned, the more I ran the other way." Adfecto, I'd be interested in your comments on Matt's risk management article.

P2P Borrowers: The Greatest Tenants You Can Find - Mike compares a peer loan to a real estate investment. He writes, "I have come to think of the people I loan money to as the ideal tenants for my virtual real estate business."

Pennsylvania loans or what were early Prosper lenders thinking? - Brett takes a look at the high rate of defaults on Pennsylvania loans. We have also wondered about Pennsylvania in the past. In addition, Brett looking for some help critiquing his new Prosper portfolio.

How to Write a Good Application for a Personal Loan - The Lending Hub (not to be confused with the Lending Club) is a new P2P lending start-up in Australia. They share some tips on how to write a good loan request as a borrower. Their tips are solid and apply no matter what company you are seeking funding from or what country you are in. Stay tuned...later this week we will have a guest post from Ivan, Lending Hub's CEO.

Thanks everyone for submitting articles. If you want to be included in Lending Carnival #5 you can submit your blog post here.

WSJ: 4 tips for Prosper borrowers

The Wall Street Journal discusses peer to peer lending in an article published this weekend, Borrowing from Peers. The differences among Prosper, Zopa, Lending Club and Virgin Money are briefly discussed and then the author provides four tips for prospective borrowers.

• Be realistic. It's important to know from the start how attractive a borrower you are and to set realistic interest-rate expectations, says Jean M. Garascia, associate analyst for Javelin Strategy & Research. The first time Ms. Rizzo asked for a loan on Prosper, for example, it didn't get funded because the proposed rate was too low for any lender to accept the risk.
• Tell your story. Part of the intrigue of peer-to-peer sites is that lenders get to know who they are funding. In some models, explaining why the money is needed and giving some information about yourself can help an investor relate to your story -- and decide to lend to you.
• Be patient. Unless a borrower is seeking a loan from an acquaintance, it might take time to get funded. "The demand for loans is much higher than the actual capital available," Mr. Garascia says. "Maybe you'll get funded in a day...or it may take longer than you were expecting."
• Understand the terms. The loan's interest rate is important, but pay attention to the terms as well. Unlike credit-card debt, this loan must be paid back in a defined period. The consequences of defaulting on a peer-to-peer loan are the same for any loan -- often a ding to the borrower's credit history.

Globefunder was not mentioned in the WSJ article, but they do appear today in an article in Michigan's Mlive.com - Kalamazoo-based Online Lender Expands into Michigan. Here's an excerpt:

"Globefunder, the Kalamazoo-based peer-to-peer online lending company that was launched last October, is now licensed to do consumer lending in Michigan. The business, started by two former Greenleaf Trust executives, Brian Mullally and John Schoolman, and Ben Decio, chief of staff for an Elkhart, Ind.-based maker of recreational vehicles and modular housing, is based at 200 E. Michigan Ave. in downtown Kalamazoo. It was already licensed and operating in 13 states -- Florida, Texas, Georgia, Hawaii, Indiana, Missouri, Louisiana, New Jersey, New Mexico, New York, Oregon, Utah and Wyoming -- before clearing regulatory hurdles and adding Michigan this past week. At www.globefunder.com, the business uses proprietary technology to offer loans from $2,500 to $25,000 to borrowers looking for reduced-interest-rate loans. It offers investors an opportunity to reap more substantial returns on typically short-term transactions. Peer-to-peer online lending has been drawing a lot of interest because industry observers say it has the potential to allow anyone with a computer to apply for and be considered for loans from people who have money to invest."

Peer to peer lending is also mentioned today in an article about recent stock market fluctuations at the UK Times Online. "Another offbeat option attracting serious consideration is Zopa, the US-backed website that brings lenders and borrowers together with a much smaller cut for the middleman," writes William Kay. Read the rest of the article at the UK Times Online.

P2P Lending Predictions for 2008

As we get ready to bring in the new year here are what a few news organizations around the world have to say about P2P lending...

Ten things that will change your future from the Sydney Morning Herald

"PEER-TO-PEER LENDING Whether you're distributing music or books, auctioning off unwanted household items, wanting to bet on a horse race or looking for a soulmate, the internet can put you in touch with someone who is interested in what you have or are.

Kiva takes that idea and applies it to the established concept of microfinance - making small loans to the working poor to help them establish or expand businesses.

So, instead of giving a donation to an organisation such as Oxfam to distribute, peer-to-peer lending lets you invest small amounts directly in a particular entrepreneur - such as Mohamad Marah in Kabala, Sierra Leone. With his $US200 loan, Marah has been able to expand his garment business, buying three extra sewing machines. So far he has repaid half the loan. More than $US15 million has already been lent through Kiva - and the default rate is claimed to be just .23 per cent. http://www.kiva.org"

Many using Web sites to find, help entrepreneurs around the world from the North Jersey Media Group

"...Some philanthropy experts worry that the peer-to-peer lending sites could suck away money from traditional charities such as UNICEF. And microlending has its share of critics..."

Get real: People will want to connect in 2008 from the USA Today

"Eisenbeis says we should expect to see more examples of 'people banding together to help each other out,' whether it's groups picketing home loan companies or individuals starting so-called peer-to-peer lending programs to assist those experiencing foreclosure and personal bankruptcy.

'There's a 'we're all in it together' feeling out there that's only going to grow as more people get affected by issues such as housing and health care,' Eisenbeis says. 'People are going to lean on each other and push those in power to find the necessary solutions.'"

Peer-to-peer lending the 'eBay of loans' from Deleware Online

"The market for the loans is still relatively small but growing fast, according to Celent, a research firm. Celent projects that $5.8 billion in peer-to-peer loans will be made in the U.S. by 2010, an 800 percent leap from the amount this year...

The more established players -- such as Prosper and CircleLending, which sold a majority stake in the company and rebranded itself Virgin Money US this year -- dominate the business. But more rivals are entering the industry at a time when even people with good credit are finding it harder and costlier to borrow from traditional sources.

In December, Zopa opened up shop in the U.S. Also this month, Lending Club, which began as a service for Facebook members, expanded nationwide.

'It seems that the credit crunch is accelerating our growth,' says Renaud Laplanche, CEO of Lending Club."

P2P Lending Review: Best of 2007

The P2P lending market has changed significantly in 2007. One year ago the only P2P lending story was Prosper. Time named Prosper the top website of 2006. BusinessWeek predicted that Prosper would be one of the Top Eight Tech Companies to Watch in 2007. A year later, Prosper continues to make headlines but several other p2p lending companies are making news as well. Here are a few highlights from 2007:


Prosper

• Named one of the 50 best websites of 2007 by Time
• Passed $100 million in loans (now at $108 million)
• Changed the way they interact with members - after several forum riots and other tense public clashes with some members Prosper deletes their forums without notice and re-opens another more moderated forum; started an official blog; starts a monthly lending market survey; starts webinars to educate new lenders and borrowers
• Registers with SEC to create $500 million secondary market for p2p loans
• Announces plans to spread to Japan
• Receives $20 million in venture capital for a total of $40 million raised
  

Lending Club

• Launches inside of Facebook and loans $100,000 during the first month (now at $4.5 million)
• Expands to users outside Facebook
• Becomes the first p2p lending platform to loan to borrowers nationwide without state-by-state lending caps
• Hosts popular YouTube video contest
• Receives $10 million in venture capital
• (Disclosure: I recently started blogging for Lending Club. Read my Lending Club posts here.)

Zopa

• Expands from the U.K. to the U.S.
• They announce a very new P2P lending model comparable to a certificate of deposit at a bank or a termshare certificate at a credit union. You also have the option to reduce the rate to help out borrowers. The loans are federally insured and currently earn 5.1%.

Circle Lending/Virgin Money

• Richard Branson purchases Circle Lending and rebrands it as Virgin Money USA
  

GlobeFunder

• Announces they will launch on October 2nd but then delays for "lending licenses and website development"
• This week they just launched a new webpage and appear to be open for institutional lenders and will allow borrowers to sign-up, but individual lenders must wait

Loanio

• Receives some minor attention in the media during the summer and, like GlobeFunder, announces they will launch in the fall but delays
• Currently advertising on homepage that they are "Coming January 2008"
  

In June we started Prosper Lending Review. It's been fun and we have learned a lot. According to visitors, these are our most popular articles in 2007.

15 Most Popular Articles of 2007

A Prosper scam: The story of Jessica Wolcott
Prosper: A hands-on education in risk management
How does Prosper compare to other investments?
Prosper Lending Review - the first month
When to bid on Prosper loans
Review: Top Prosper Blogs
What is Loanio?
Borrowing money to lend on Prosper: Wise or Foolish?
Credit Scores on Prosper - Part 1 of 2
Why would a borrower use Prosper instead of a traditional bank?
Equity sharing - Prosper for real estate
Loanio prepares for fall launch
Prosper Lending 101 - webinar review
Prosper CEO: Lenders avoid subprime and 'flight to safety'
Lending Club announces $5000 video contest

The most popular articles are not always the most useful articles. While A Prosper scam: The story of Jessica Wolcott may be interesting reading, it is not going to provide solid actionable investment advice like some of the following articles. If you are about to commit your hard earned money to p2p investments it makes sense to do as much research as you can. Of the 100+ post of the last year I recommend that following ten as required reading for all investors (I'll also note they they were all written by the other co-author of this blog, Matt):

10 Best PLR articles of 2007

How does Prosper compare to other investments?
Prosper: A hands-on education in risk management
Why would a borrower use Prosper instead of a bank?
Borrowing money to lend on Prosper: Wise or Foolish?
Most Prosper lenders do not diversify
Are all Prosper loans within a credit grade created equal?
An analysis of pre-payment risk on Prosper loans
Are non-homeowners a safer lending risk in a declining house market?
Credit Scores on Prosper - Part 1 of 2
When to bid on Prosper loans

We look forward to 2008 and the many changes it will bring to the p2p lending marketplace. Happy New Year!

P2P Lending Report: Disruptive service or market niche?

Veteran analyst Jim Bruene, who runs NetBanker, has just published a 48-page report about Prosper, Lending Club and Zopa - Person-to-Person Lending 2.0 - Disruptive service or market niche? As part of the research process he became a lender and a borrower at all three major U.S. P2P lending exchanges: Prosper , Zopa, and Lending Club. He also set up friends and family loans at Virgin Money USA and LoanBack.

The report was originally expected to come out earlier but due to the rapid changes in the market he delayed the report. As he explains on Netbanker, "I had originally intended on publishing it in early December. But as I was trying to wrap things up, Zopa launched its new U.S unit. So I stopped the presses and added an analysis of its unique model. Then as I was finishing that, Lending Club made a significant change last week, becoming a national lender instead of state-sanctioned one. That too is now in the report."

Here's the abstract:

Person-to-person lending is the perfect product for the Web 2.0-social-networked consumer. Why, then, has growth been relatively slow compared to other networked services? Because it’s a difficult business. Not only are P2P lenders competing with 20,000 other financial institutions for good borrowers, the are up against thousands of investment alternatives for funds to lend, all the while waging a fierce battle with fraudsters and deadbeats. It’s not a business for the faint of heart.

In this report, we look at the market as a whole, examining the strengths and weaknesses of existing products. We list opportunities both for web-based startups and existing financial institutions and lay out a ten-year market forecast. Finally, we take a close look at the four major U.S. P2P lenders: Prosper, Lending Club, Zopa and Virgin Money.

If you would like to have a copy of the report you can get it here. It's only $595.