Lending Club Introduces IRA Product

Lending Club CEO and Founder Renaud Laplanche announced today that Lending Club has introduced the first IRA product that allows for peer to peer investments.

Laplanche told Prosper Lending Review today by e-mail, “now investors have more choice for their retirement accounts beyond traditional asset classes. Lending Club is delighted to provide this new alternative to investors. We look forward to offering more innovation and value for financial consumers in the future.”

Potential Lending Club IRA investors should remember that they need to enroll (the application goes by old-fashioned mail) and fund their account by 4/15/09 if you want to enroll for the 2008 tax year. EntrustCAMA, part of the Entrust Group, serves as the administer for these accounts.

Enrollment information is located online at https://www.lendingclub.com/sdIRA/registerIRA.action.

Lending Club has been nominated for the “Top 100 Innovators” by The Industry Standard. It was also recognized recently as one of the 20 “Breakthrough Ideas for 2009” by Harvard Business Review.

Jessica Ward is a freelance writer based in Seattle. She follows personal finance and family life. She also blogs at The Pennywise Family.

Mint adds Lending Club functionality; registers millionth user

Mint just reached it's one-millionth user! You can read about Tammi K from Oregon on Mint's blog. What I love is that to reward her, and to celebrate having one-million happy users--Mint.com paid off Tammi's credit card, and her mother-in-law's card since she is the one who referred her to Mint. That's an awesome surprise!

A couple of other interesting notes on Mint.com--SmartyPig and Lending Club accounts now work in Mint. Also, if you have assets, you can show them in Mint (home equity, concert posters, cars, etc.).

Lots of exciting development going on in recent weeks with Mint, so I thought it would be worth mentioning.

Green Sherpa Review: Personal Cash Flow Management

Ok, I admit it, I choose financial companies to profile based on my level of curiosity from the company’s name. Yes, a classic case of judging a book by its cover.

Unfortunately, with the Green Sherpa book, I’ve not had an opportunity to get past the cover, so will have to write this review solely based on the company’s press kit. A less-than-desirable level of transparency for this blogger, but you might want to know what this funny-named company does too, so I'll share what I've learned so far and fill you in later as I learn more.

I reviewed Green Sherpa’s materials and then tried to log in for the 30-day free trial. I was greeted by the following message:

Thank you for your interest in Green Sherpa and for signing up for our private beta!
We have been overwhelmed by the positive response and are slowly letting users in during our beta phase. Watch out for an e-mail with an activation link over the next few weeks as we activate your account.
The Green Sherpa Team

Well, I’m glad they’re overwhelmed, I guess, but considering how overwhelmed they are, you’d think there would be a little more buzz about them. Here’s what I know (again, almost exclusively from their PR efforts).

Green Sherpa is a fee-based personal cash-flow software. Their target is the serious DIY money-manager age 30 to 55 who currently uses software from a box on a shelf. They believe their continuous improvement cloud-computing model will show the consumer how easy it is to work online vs. downloading and installing software you’ve got to update and upgrade all of the time. Their theory is that this pitch will also help users to shell out their $7.95 monthly subscription fee.

Not updating and buying new software all of the time would sell me if I were in the market for such software. When will Microsoft get the hint and start doing this with Office? I digress….

Green Sherpa offers a few novel approaches that you don’t find in the free web apps like Wasabe and Mint. You can develop goals, and Green Sherpa shows you progress toward your goals. It also shows you cash-flow projections—the month’s “where you’re going” versus the “where you’ve been” information that most of us get from our personal finance reports.

The dashboard is spreadsheet based so should keep happy all of the spreadsheet devotees. Another distinct advantage is that you can share your information “real time” with your financial team (CPA, broker or attorney) without burning reports to disk, or emailing/printing cumbersome PDF reports. It seems like it would also be nice for baby-boomers who're managing their elderly parents' finances, especially if from a long distance.

Green Sherpa debuted September of 2008. It is currently in beta-release. As mentioned before, it is based on monthly subscriber fees of less than $10 per month. A 30 day free trial is offered, but they’re not accepting new subscribers at this time. I’m not sure if this is a capacity issue or an indicator of institutional health. Overall, it’s a great idea, and if it’s as good as advertised, I could see the potential that it may pay for itself in terms of subscriber fees to the user. I’d love to give this a test-drive and hope that we’ll hear more from these guys before the Finovate conference next month.

Jessica Ward is a freelance writer and blogger. She blogs on personal finance, real estate and families living frugally.

Lending Club raises $12 million

Lending Club just announced they raised an additional $12 million in funding and hired a new marketing officer. Previous funding includes $10 million in late 2007 and an additional $4 million in September 2008. From the press release:

SUNNYVALE, Calif.--(BUSINESS WIRE)--LendingClub.com, the peer lending network that brings together investors and creditworthy borrowers, announced today that it has closed a $12 million Series B round of funding. Morgenthaler Ventures led the round and is joined by existing investors, Norwest Venture Partners and Canaan Partners. Rebecca Lynn, a Morgenthaler Principal, is joining Lending Club’s board of directors.

Lending Club also announced today that it has added Pamela Kramer as Chief Marketing Officer. Ms. Kramer is an established marketing veteran with more than 17 years of experience. She was most recently Chief Marketing Officer of MarketTools, Inc and, before that, spent 9 years in leadership roles with E*TRADE Financial helping to shape the development of online investing in various capacities, including most recently as Chief Marketing Officer.

“This additional capital will allow us to continue to expand our capabilities and accelerate the growth of our customer base. Lending Club is proud to be building a network where individuals come together to provide financial value to each other beyond what traditional banks can provide. We are equally proud to have great investment partners in Morgenthaler, Norwest and Canaan Partners,” said Renaud Laplanche, Lending Club’s CEO and Founder.

“We were attracted to Lending Club because it offers a compelling proposition in any market, but especially in today’s environment,” said Rebecca Lynn, Principal at Morgenthaler Ventures, “Borrower members find much-needed relief in a tight credit environment, and lender members have earned an average annual return of 9.05% over the last 20 months, which is better than most investment alternatives.”

Pertuity Direct Reaches $500K In Two Months

Just two months after launch, Pertuity Direct's mutual-fund P2P lending platform now has $500,000 to lend from members. Pertuity's statistics show that 70% of members on it's web site are taking the next step and opening an account. That is an excellent adoption rate for an online technology.

Pertuity Direct continues to focus on prime borrowers with an average FICO score of 740. The average loan is $9,800. CEO Kim Muhota credits PD's success with the tightening of the consumer credit markets, particularly in credit cards according to a company press release issued today.

I asked Pertuity Direct what the average investor puts into the fund but they're not releasing that info right now, but will be in the near future, so they'll let me know later on.

Our previous coverage of Pertuity Direct:
March 2009: CEO Kim Muhota posts a video explaining the PD lending model
February 2009: Jessica's interview with CEO Kim Muhota - Social lending meets mutual funds
January 23, 2009: Pertuity Direct removes beta label; launches officially
January 2009: Jessica's Pertuity Direct Review
December 2008: Pertuity Direct to launch 'immediately after the New Year'

Jessica Ward is a mommy, freelance writer and blogger. She also blogs on raising a frugal family at http://www.pennywisefamily.blogspot.com/ and on frugal cooking at http://www.3rdworldfood.blogspot.com/.

Pertuity Direct CEO Kim Muhota explains lending platform

CEO and Founder Kim Muhota introduces Pertuity Direct to potential lenders and borrowers through the following 3-minute YouTube video.

Among other things, he explains his motivation for starting Pertuity Direct. "As a former executive at one of the largest banks in the country, I became well aware through the years of the complaints customers have with respect to their banking relationship and quickly realized that their was a unique opportunity to build a company that was truly focused on the customer first."

Our previous coverage of Pertuity Direct:
February 2009: Jessica's interview with CEO Kim Muhota - Social lending meets mutual funds
January 23, 2009: Pertuity Direct removes beta label; launches officially
January 2009: Jessica's Pertuity Direct Review
December 2008: Pertuity Direct to launch 'immediately after the New Year'

Mortgage and Refi Solution: SmartHippo.com

Another participant at the Finovate 2009 conference in April is the Montreal-based SmartHippo.

Smart Hippo is a smart idea indeed. It is an innovative combination of social network and search engine, specific to mortgage lending. SmartHippo does for mortgage shopping, what Travelocity does for vacation planning.

A SmartHippo user can search mortgage rates that came from banks, from web bots that crawl for additional rates, and even from customers who post the rates that they’ve received. Users (called “hippos”) can also post comments about the service they’ve received from lenders or how their closing process went.

One of the greatest benefits that I’ve observed is that you can “window shop” for rates before supplying identifying information about yourself. If you went “shopping” for a loan with a mortgage broker, your FICO score would show an inquiry made, and it would cost you points on your score.

SmartHippo allows you to “look before you leap” so to speak. Also, the SmartHippo search engine shows you the available ranges for closing costs as well as interest rates, so you have a clearer idea of what you’re getting into. You won’t be lured by low rates only to be surprised with astronomical closing costs.

SmartHippo began operations in September of 2007, but only really began marketing in October of 2008. Marketing consists of viral and Internet efforts. Blogging, contests and Twitter (you can follow @SmartHippo along with me). Right now the South By South West conference is running, and they’re holding a “Hide the Hippo” contest via Twitter, encouraging participants to locate the hippo around Austin, TX.

Jessica Ward is a freelance writer and resident of not-so-sunny Seattle. She also blogs about frugality and family at The Pennywise Family. You can follow her on Twitter at @Jessc098.

Information solutions for the microcredit industry

Microcredit is supposed to describe loans offered with no collateral to support income-generating businesses aimed at lifting the poor out of poverty. Yet today there are many organizations that call themselves “microcredit” programs that offer loans to people who are not poor, that require collateral, and that are used primarily for consumption rather than income generation. There are even “microcredit” programs that are generating enormous profits for investors by charging interest rates as high as 100 percent or even higher!

Under the circumstances, we really don’t know what we are talking about when we talk about microcredit. I think it is time we classify microcredit programs according to clear, consistent categories. - Muhammad Yunus in Creating a World Without Poverty

Last month Muhammad Yunus spoke at George Washington University. He talked about creating social businesses and microcredit. His speech was well timed - It just so happens I'm currently a graduate student at GW and am working with a small team to build a Microfinance Resource System for lenders.

With over 3,000 microcredit organizations, investors face a bewildering variety of options. A lender may want to focus his efforts on a specific country, concentrate on female borrowers, or loan to only the most destitute. He may want his contribution to be tax-deductible or may require his capital be repaid over time with interest while avoiding usurious organizations who exploit borrowers under a ruse of generosity. We hope to solve these problems and the challenges raised by Dr. Yunus in his book.

We recently submitted this project to Dell's Social Innovation Competition. Voting ends today at 5PM CST. We were ranked as high as #4 out of 500+ projects but have slipped due to a flurry of last minute voting. We need to get back in the top 25 to advance to the next round. Please read our 250-word project description, register (takes 1 minute), and vote now.

Update: Thanks LazyMan for helping to promote the project.