mortgage loan broker: P2P lending: 2008 in review

The P2P lending marketplace changed significantly in 2008. Of course, we said the same thing in our 2007 P2P lending review. There are also likely to be even more significant changes in 2009.

In 2006 the only real P2P lending story was Prosper. In 2007, Lending Club launched and Zopa expanded to the U.S. In 2008 the story is dominated by regulation - Lending Club obtained a green light by the SEC and most other companies shut their doors as they work towards SEC approval.

Here's a look at each individual company:

Lending Club

First a quick review of 2007: launched inside of Facebook in May 2007 and loaned $100,000 during their first month, expanded to users outside Facebook and became the first p2p lending platform to loan to borrowers nationwide without state-by-state lending caps, hosted a popular YouTube video contest, and received $10 million in venture capital
In April 2008 Lending Club halts lending in order to register their secondary market and lending operations with the SEC
In October Lending Club re-opens for investors and announces a secondary market

Prosper

First a quick review of 2007: named one of the 50 best websites of 2007 by Time, passed $100 million in loans (now at $108 million), received $20 million in venture capital for a total of $40 million raised
April - Follows Lending Club's lead and eliminates state rate caps
October - Immediately after Lending Club reopens, Prosper enters a quiet period and halts operations
December -Prosper is fined $1 million. They then file a S-1 registration statement with the SEC.

Zopa

First a quick review of 2007: Zopa expanded from the U.K. to the U.S.
Named 'most threatening non-bank' in April by the 2008 Retail Banker International Forum.
In October I had a bad experience trying to obtain a loan from Zopa. A couple days later Zopa closes operations in the US

Loanio

Loanio launches in October with a focus on platinum verification and co-borrowers
Follows Prosper's lead and halts operations in November in order to register promissory notes with the appropriate securities authorities.

Other companies to capture our attention in 2008:

Swap-A-Debt seeks regulatory approval
Pertuity Direct announces they will launch 'immediately after the New Year' And they do.
Fynanz becomes the first P2P student loan marketplace. They halt p2p lending and rebrand themselves (Jan 2009) as a loan platform for credit unions.
In Canada, IOU Central beats CommunityLend to Canada's market for a couple of weeks in February before they halt operations to 'resolve a regulatory matter'. We are still waiting for the first p2p lending company to open in Canada.
In January 2008 Globefunder opens their doors to borrowers. Since they are only open to institutional investors we have not discussed them on the blog much since.
Microfinance grows in the U.S. and around the world. We will cover these companies more in 2009 than we have in the past.

We started Prosper Lending Review in 2007. It has been fun and we have learned a lot. Our traffic has grown significantly. According to unique visitors, these are our most popular articles in 2008.

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P2P lending: 2008 in review