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[onthefence]

Prosper should try borrowing from itself  

At one point in time, this would have been a very viable option for prosper.

[ira01]

And so it begins, the taking out of loans by Prosper when the only significant asset that can be taken are the loans obtained by lenders "investors".

$4,919,588 in loans have been generated since July 2009 under the new lender investor agreement.  If/when Prosper goes south, I don't see how Nigel Morris has any less of a claim to these funds than Prosper's lenders investors. 

I agree.  It seems to me that Morris and the Prosper 3.0 "lenders/investors" would be unsecured creditors on equal footing.  So if Prosper went BK tomorrow after blowing Morris's $1M, even if every Prosper 3.0 borrower paid their loans in full, those "lenders/investors" would only receive 83% of their money, while Morris would get the other 17%.

[112233]

maybe they are arbitraging 15 percent into 35 percent 

[Faithful_Steward1]

1) Will Prosper Be a BLender?!?!

2) Seems like most lenders should prefer directly loaning to Prosper at 15% over any other loan on Prosper, because if Prosper defaults all other loans will default from an investor's perspective. Why loan to a AA individual at 12% when the company which owns the loans is more likely to default than the individual?

[kenL]

they would only need to borrow about 40,000 per working day to fund operations. It looks like now they are generating about 100k to 200k a day in loans. its possible....until the bills start rolling in. I wonder if they are considering it.

[havastat]

Unless the underlying business really improves, one can't keep oneself alive that way for very long. Although Madoff managed pretty well.