Two more articles from BW about P2P and/or microlending..
http://www.businessweek.com/magazine/content/07_52/b4064038915009.htmand the advantages and disadvantages of same (slideshow):
http://images.businessweek.com/ss/07/12/1221_peer_lenders/index_01.htmevery other p2p has advantages and disadvantages. This is Prosper's part of the slideshow:
Small Biz
Prosper
www.prosper.comBiggest advantage: Prosper lets borrowers set the top interest rate they're willing to pay, and competitive rates can be bid down by lenders.
Biggest disadvantage: There's no guarantee a borrower will get funded, especially if other borrowers are willing to pay higher rates.
Prosper lets borrowers make their case for credit by setting the amount they need (from $1,000 to $25,000) and explaining what it's for and what interest rate they're willing to pay. Lenders can fund all or part of the loan. They can even bid down the interest rate if several lenders compete to fund one loan.
Launched: February, 2006
Loan fees: Prosper takes 1% (2% for borrowers with low credit scores) of principal
How long it takes: Loans can theoretically be funded the same day; auctions can last as long as 10 days
Average loan amount: $7,000
Default rate: 3% (expected to rise as more loans mature)
Total value of loans processed: $100 million
Share of total that were business loans: 20% to 30%