Peer to Peer Lending Zopa.com and Prosper.com

Online lending has been around for years, however a viable platform for Peer-to-Peer lending is a new arrival. Now there are two. The summaries are written from a potential lender’s perspective.

For US borrowers & lenders, There is Prosper.com. Prosper was founded by Chris Larsen, founder of E-Loan. It seems to be a promising site which, if policed properly, could grow exponentially. Prosper has been called the eBay of lending. While eBay has been wildly successful, the growth has not been without casualties. I can speak knowledgeably as a former eBay powerseller who walked away from eBay, in part, because the fraud & phishing attempts became a problem. Fortunately for eBay someone has surely moved in to take my place. Party on, Meg. While still a young site & a bit rough around the edges, Prosper.com strikes me as an implementation which could work if they succeed in building a community. I did join Prosper with the intention of lending some funds through one of my business accounts. Unfortunately, at this time, Prosper.com will only issue 1099’s to individuals and is, for most purposes, a consumer to consumer site. In this regard, Prosper very different from eBay which facilitates b2b, b2c, & c2c transactions.

Similar in concept is Zopa.com, a UK based p2p lending site which is planning a US debut. Zopa is slightly different in that instead of bidding to lend to a particular borrower, lenders can choose from risk-rated groups of borrowers. Lenders can also choose the interest rate. On the UK site lenders wishing to lend over £25,000 or more or are lending in the course of a business are welcome. However a license is required. Hopefully, Zopa.com will use a similar model & include businesses as lenders in the US launch. This small business will be among the first lenders in line.