I received a tip in my email box that a special meeting of shareholders occurred on August 21st for the board of Trustees at the National Retail Fund III. The purpose of the meeting was “to approve the liquidation and distribution of all shares of the fund.” Oh snap!
Say it ain’t so? Could Pertuity Direct really be leaving us? They’ve been pretty quiet in recent months, not issuing a press release since March, and no blog posts since May. A couple of months ago their Commission Junction account deactivated without warning to advertisers (I was very surprised by this as I’d been running their ads for some time on my Pennywise Family blog). Keep in mind, the company only went "live" in January of 2009.
A few prominent PD figures have recently vanished from the Twitterscape.
Today I tried to call, but the telephone numbers have all vanished from the Web site. I found a number for Gemini Fund Management, the “transfer agent” for National Retail Fund III. I don’t remember them being part of the picture when I interviewed the PD team back in March, but that is the sort of detail I may have forgotten.
I asked for a telephone for PD and found the number disconnected and forwarded, to CEO Kim Muhota’s cell phone. When I spoke to them in the Winter, I seem to remember there being a staff of eight, so this seemed like an unlikely transfer.
I’m still trying to figure out what’s going on, but for now this is where it stands—it looks like Pertuity Direct may be gone. I’ll post an update to verify when/if I’m able to learn more.
Jessica Ward is a freelance blogger and writer based in Seattle. She blogs on frugal living, and family life at www.thepennywisefamily.com.
Showing posts with label Pertuity Direct. Show all posts
Showing posts with label Pertuity Direct. Show all posts
IOU Central Launching in USA
Note: IOU Central was not available for comment, due to the SEC’s “quiet period” though they have been contacted for comment.
Look out Lending Club, Pertuity Direct and Prosper, Canada’s IOU Central is on its way to America.
IOU Central filed a registration statement with the SEC on May 13th in which they seek to “register the offer and sale of up to $225,000,000 in aggregate principal amount of Borrower Payment Dependent Notes.” The notes are to be offered on a continuous basis following the effective date of the registration statement.
According to the company’s press release notes “will be issued in series and the proceeds from the sale of each series of notes will be designated by the registered lenders who purchased the series of notes to fund an unsecured consumer loan originated through the IOU Central loan marketplace to a registered borrower.”
IOU Central first made news by becoming the first p2p lending company in Canada in February 2008. They were only open a couple of weeks before they halted operations to 'resolve a regulatory matter'. We are still waiting for the first p2p lending company to open in Canada. Right now the most likely contender is CommunityLend.
IOU Central purchased a P2P lending startup from Denmark called Fairrates. Fairrates was built in 10 months by Arkadiusz Hajduk and opened in April 2007. They had lenders willing to invest but had a problem finding and vetting good borrowers. In Denmark there is no access to credit history and Fairrates was hit with a couple fraud cases.
After little success in Canada, IOU Central will try its luck in the United States. Prospective borrowers and lenders registering on the site receive the following email:
Look out Lending Club, Pertuity Direct and Prosper, Canada’s IOU Central is on its way to America.
IOU Central filed a registration statement with the SEC on May 13th in which they seek to “register the offer and sale of up to $225,000,000 in aggregate principal amount of Borrower Payment Dependent Notes.” The notes are to be offered on a continuous basis following the effective date of the registration statement.
According to the company’s press release notes “will be issued in series and the proceeds from the sale of each series of notes will be designated by the registered lenders who purchased the series of notes to fund an unsecured consumer loan originated through the IOU Central loan marketplace to a registered borrower.”
IOU Central first made news by becoming the first p2p lending company in Canada in February 2008. They were only open a couple of weeks before they halted operations to 'resolve a regulatory matter'. We are still waiting for the first p2p lending company to open in Canada. Right now the most likely contender is CommunityLend.
IOU Central purchased a P2P lending startup from Denmark called Fairrates. Fairrates was built in 10 months by Arkadiusz Hajduk and opened in April 2007. They had lenders willing to invest but had a problem finding and vetting good borrowers. In Denmark there is no access to credit history and Fairrates was hit with a couple fraud cases.
After little success in Canada, IOU Central will try its luck in the United States. Prospective borrowers and lenders registering on the site receive the following email:
Thank you for your interest in IOU Central!
We are getting ready to release an online marketplace that will revolutionize peer-to-peer lending. Our platform will give borrowers the benefit of a true marketplace that allows for better interest rates. The platform will also give lenders freedom in lending with our real-time bidding system. We will keep you notified of our progress as we register with the Securities and Exchange Commission (SEC).
Thanks for being a part of the IOU Central revolution!
See you soon!
The entire IOU Central team
We love hearing from you, so if you ever have any comments,
questions, feedback, ideas, etc. please don't hesitate to email us at
feedback@ioucentral.com. We have a lot in the works, so visit ioucentral.com
often..
From company news and press releases it appears that IOU Central will have a slightly higher credit score requirement than Pertuity Direct and Lending Club—according to an article on wiseclerk.com, a Equifax score of 670 will be required. Lenders will pay a 1% servicing fee (the same as Lending Club). Borrowers will pay a 2% loan origination fee, and borrowers can request loans of up to $25,000 in two separate loans.
IOU Central is a peer-to-peer lending company. The company’s internet-based loan marketplace enables borrowers to post loan requests and purchase notes from lenders. IOU Central launched in Canada’s Peer to Peer lending space in February 2008, but stopped shortly thereafter due to regulatory conditions. IOU Central is headquartered in Kennesaw, Georgia in the United States.
Jessica Ward is a freelance writer and editor, based in Seattle, WA and writes in the personal finance and microfinance space. You can check out her other work at www.jessicaward.me.
IOU Central is a peer-to-peer lending company. The company’s internet-based loan marketplace enables borrowers to post loan requests and purchase notes from lenders. IOU Central launched in Canada’s Peer to Peer lending space in February 2008, but stopped shortly thereafter due to regulatory conditions. IOU Central is headquartered in Kennesaw, Georgia in the United States.
Jessica Ward is a freelance writer and editor, based in Seattle, WA and writes in the personal finance and microfinance space. You can check out her other work at www.jessicaward.me.
Pay it forward and win a Kindle from Pertuity Direct
Coinciding with the Finovate Conference in San Francisco this week, is a contest from Pertuity Direct, which they're calling Pay it Forward, Pay it Down. Pertuity Direct is looking for people to vote for a $2,500 loan forgiveness. All "voters" will be rewarded with the opportunity to win a Kindle2.
You can find out more about the contest online here, or skip straight to voting here.
Voting closes on May 14th.
You can find out more about the contest online here, or skip straight to voting here.
Voting closes on May 14th.
Pertuity Direct clarifies underwriting philosophy; discloses loss assumptions
Peer to Peer lenders have a little more information readily available now from P2P Mutual Fund Pertuity Direct. This month, Pertuity Direct has updated it's online credit policy and disclosed loss assumptions.As you may know, mutual funds are prohibited from projecting potential returns. A savvy investor now has a little more information available from Pertuity's updated credit policy. PD has added loss assumptions by FICO band, which makes an interesting read for people who like to crunch numbers. Default predictions range from 2.7% to 6% based on credit grade. PD has maintained the requirement for a minimum FICO score of 660 and no more than 40% debt-to-income ratio.
Here is the complete, newly published underwriting philosophy:
Our Underwriting Philosophy
At Pertuity Direct, we evaluate an applicant's eligibility for a loan and determine the interest rate of that loan based on the following criteria:
Here is the complete, newly published underwriting philosophy:
Our Underwriting Philosophy
At Pertuity Direct, we evaluate an applicant's eligibility for a loan and determine the interest rate of that loan based on the following criteria:
- we do not overextend a borrower with new debt
- approved borrowers are offered low market interest rates
- lenders in the community preserve their investment capital and earn a competitive return
These goals can be met by ensuring that each borrower's financial situation is reviewed with regards to their willingness and capacity to pay and an appropriate decision rendered.
In recent times, some financial institutions have suffered because their credit policies began to ignore key components to underwriting a healthy loan portfolio. Pertuity Direct does not solely rely on a credit score or whether the loan is secured against home equity. What we do is use a mix of human review, statistical decision making, and verifications to make sure that we deliver the right product to the customer. In some cases, that may mean that we are not able to approve a borrower due to the fact that we do not charge usurious interest rates to compensate for high risk, nor will we lend to a borrower who we feel we may endanger with over-indebtedness.
An additional strategy to ensure the health of the portfolio involves making conservative assumptions regarding the default risk of the underlying assets. Both eligibility decisions and interest rate assignment are driven from the estimated risk of new bookings, and Pertuity Direct has taken a conservative approach. For example, for the prime and super-prime segment that we are targeting (average approved borrower FICO to date is about 740), our pricing policy has built in the following expectations for default risk (based on a $12,000 loan):
- 660 – 700: 6.0%*
- 701 – 750: 3.8%*
- 751 – 850: 2.7%*
*default risk is annualized in the form of balances defaulted over balances outstanding
We believe that transparency is important so our borrowers can understand what affects loan eligibility and investors can understand how we generate the assets in the loan portfolio. To that end, below are some of the criteria used in our underwriting. We welcome any feedback from borrowers or investors which can be sent to underwriting@pertuitydirect.com.
Underwriting Criteria- A debt-to-income ratio generally below 40%
- We often require proof of income in the form of documents, especially for larger loan sizes
- A minimum credit score (FICO) as reported by the Experian credit bureau of 660 or higher
- No bankruptcies within the past ten years and no more than one public record in the past ten years
- An established credit history at least two years long with five total accounts
- No current delinquencies on any trades
In addition to these criteria, Pertuity Direct also looks at factors such as number of recent inquiries, loan size in relation to income, amount of recent debt opened, number and type of mortgages held, and credit card balances as a ratio to available card lines.
Jessica Ward is a freelance writer based in Seattle. She also blogs at www.pennywisefamily.blogspot.com.
Pertuity Direct Sees Rapid Growth
In an email to members, Pertuity Direct's management team said thousands of people have joined the p2p lending platform and their membership has grown by 300% from February to March. Here are some additional statistics about current PD borrowers:
- $15 Million in loan demand in the first few months
- Average Credit Score: 737 ("Super Prime")
- Average Interest Rate: 13.6% (range is 8.9-17.9%)
- Average Loan Amount: $14,600 (range is $1,000 - $25,000)
The average loan amount is up significantly from $9,800 reported last month while the average credit score has remained steady. Pertuity Direct launched in January and is one of two p2p lending companies registered by the SEC to operate in the US.
Our previous coverage of Pertuity Direct:
- March 2009: Pertuity Direct reaches $500,000
- March 2009: CEO Kim Muhota explains the unique 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'
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'
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'
Nuwire's Cost-Cutting Tips for Businesses: #1 Peer to peer lending
NuWire Investor just published an article titled Ten Cost-Cutters for Businesses. Here is their first tip:
Capital: Free money almost always comes with strings attached. But if you really need capital, here are some ways to get cash, for a limited time or a small fee:
Although the article does not mention it, Prosper is actually closed right now while they register with the SEC.
Microlending typically refers to very small loans. With Grameen America, for example, the average loan size is $2,000. These are generally targeted to poor entrepreneurs, typically women, who do not have access to traditional credit markets. The upper limit on loans through most peer to peer lending site like Lending Club is $25,000.
While I'm pleased to see NuWire mention peer to peer lending, the information presented is a little inaccurate.
Capital: Free money almost always comes with strings attached. But if you really need capital, here are some ways to get cash, for a limited time or a small fee:
- Peer-to-peer (P2P) lending is a way to find private lenders who will lend money in exchange for equity or some other security. Prosper.com is one source.
- Microlending groups offer business loans at very low rates. These are not exactly free, but they come close.
Although the article does not mention it, Prosper is actually closed right now while they register with the SEC.
Microlending typically refers to very small loans. With Grameen America, for example, the average loan size is $2,000. These are generally targeted to poor entrepreneurs, typically women, who do not have access to traditional credit markets. The upper limit on loans through most peer to peer lending site like Lending Club is $25,000.
While I'm pleased to see NuWire mention peer to peer lending, the information presented is a little inaccurate.
Pertuity Direct--Social Lending Meets Mutual Funds
Following my review of Pertuity Direct and Tom’s announcement of the official launch, PLR was contacted by the PR team at Pertuity Direct for an interview, and I was fortunate enough to talk with their management team including CEO Kim Muhota and Charlie Schliebs who is an independent board member for the National Retail Fund, which holds Pertuity’s funds. Also on the call was Lisa Lough, SVP of marketing for Pertuity, Inc.
As we mentioned before, this team has experience and credentials to spare, but their energy for their business model is also extraordinarily contagious. My prediction is that the combination of this energy, the security of their mutual fund-style of social lending and the precipitous failing of traditional lending is going to serve Pertuity well in the near future.
We’ve recently covered them, so I’ll keep this post short and focus on the new items that I’ve learned and a brief futuring discussion that I had with Kim and Charlie who indulged my interest in their version of what the future of social banking may hold.
For Lenders: Pertuity Direct is “social lending interval fund,” where lenders buy into a risk-classed pool of borrowers. Two pools are available now via the National Retail Fund for, but others are planned for the future. An advantage to the mutual fund approach is liquidity in your assets. You don’t have to wait a 3 year loan term to get your money back. One disadvantage is slightly higher maintenance fees, right now at about 3.17%. (I’m not sure how this offsets with the default rates in traditional P2P loans, so if anyone has thoughts on this, I’d love to hear them). Pertuity Direct requires a minimum investment of $250 USD, and you’ll experience a small fee if you withdraw before one year in the fund.
For borrowers there are several advantages. First, you don’t have to spill your financial guts or upload a glamour shot to get funded. Nobody will take your spelling into account in funding your loan (I’m guilty of this with my Lending Club account). Borrowing on Pertuity Direct doesn’t feel like running for Prom Queen in high school. You will know what interest rate and terms you’ll be offered and you can take it or leave it. Your loan will be approved or not, and funded within three days, just like a bank. The process is simple, familiar and respectful of your privacy.
Muhota has had a long time to stew on this plan. He first formed his idea seven years ago and has followed the trends. Plans for launch went on hold as they decided how best to comply with SEC regulations to ensure a secure product and legal compliance on all sides, and they launched PertuityDirect.com on January 22, 2009.
When I asked Kim Muhota and Charlie Schliebs about the prospects for long-term social finance, their energy level became even higher. They agreed that many people are loosing faith in traditional banking, and expecting more from their money. When I asked what the near future may hold for Pertuity, Muhota explained that they’re looking into shorter and longer term products for borrowers. I pressed further and asked if that might include “social” mortgages and revolving lines like credit cards. He replied “absolutely” elaborating that consumers and lenders alike are going to be drawn increasingly to the low overhead, lack of what he called “legacy costs” and the growing uncertainty of traditional banking.
I’d have to agree. Why have your money buying some Bank MBA’s Bentley when you could have it working for you in a high yield, responsibly managed product that comes equipped with all of the institutional rigors of a traditional banking product?
Special thanks to Pertuity Direct’s team for spending some time with me this week.
Jessica Ward is a freelance writer based in the Seattle area.
Last week in review, and what to watch for this week.
1/21/09: Pertuity Direct Launches
1/22/09: Swap-A-Debt Launches
1/23/09: Liberia gets its first microfinance bank
1/23/09: Peer to peer loans make the Wall Street Journal
1/24/09: Some complain about Pertuity Direct using a “hard pull” on a borrower’s credit history.
What to watch for this week:
More information on Swap-a-Debt’s launch.
Exciting news from Microplace!
1/22/09: Swap-A-Debt Launches
1/23/09: Liberia gets its first microfinance bank
1/23/09: Peer to peer loans make the Wall Street Journal
1/24/09: Some complain about Pertuity Direct using a “hard pull” on a borrower’s credit history.
What to watch for this week:
More information on Swap-a-Debt’s launch.
Exciting news from Microplace!
Pertuity Direct removes beta label; launches officially
After a couple weeks of live beta operations, Pertuity Direct today officially announced the launch of its "next generation social finance platform." On the Pertuity Direct Blog CEO Kim Muhota explains why this is the right time to launch a social lending platform. Earlier this week, Jessica Ward authored a review of Pertuity Direct for Prosper Lending Review.
Here is the official press release:
Pertuity Direct Launches Next Generation Social Finance Platform
Company Brings Together the Advantages of Capital Markets, Social Networking and Traditional Banking
Vienna, VA, January 22, 2009 – Pertuity Direct, an online consumer financial services company built on the foundation of mutually responsible banking, today announced the launch of its next generation social finance platform. Pertuity Direct’s platform enables borrowers and lenders to come together in a social lending network to obtain smarter financial solutions and better rates. Through the National Retail Fund, members have the potential to earn competitive returns via a regulated investment fund.
By eliminating the traditional bank as the middleman, consumers can now get better interest rates than they would typically experience with banks or credit card companies. “Our model is unique in that it combines the benefits of social lending with the strong underpinning of credit risk management, and privacy” stated Kim Muhota, CEO of Pertuity Direct. “For borrowers, Pertuity Direct does not require any public posting of personal credit information, and for lenders, there’s no bidding, researching or guessing involved. We make the process quick, safe and optimal for both parties.”
Investments are made through the National Retail Fund, a social lending mutual fund that combines lenders’ capital to fund a diversified group of approved and credit worthy borrowers. The money is lent to a large group of borrowers through the fund, and as such creates safety of automatic diversification of investment. Unlike with other social lending models, lender money is not tied up for long periods of time, nor is liquidity tied to individual loan repayment. The National Retail Fund provides liquidity through quarterly share repurchases. Currently, two funds are available via the National Retail Fund: National Retail Fund II and National Retail Fund III. Further details on both funds can be obtained in the prospectus.
“By investing in the National Retail Fund, a lender’s money goes to work immediately at account opening, and funds are deployed to available borrower loans without delay,” said Andrew Rogers, Chairman of the Board and Treasurer of the National Retail Fund and President, Gemini Fund Services, LLC. “With this approach, lender money does not sit idle until suitable borrowers are found and the bidding process concludes. This model makes the social lending process easy and efficient for the investor, and beneficial to the high credit quality borrower.”
As part of the social finance platform, the company offers a ‘Pertuity Bucks’ rewards program to lower or eliminate borrowers’ principal loan balances. Borrowers are given the opportunity to tell their story when they apply for a loan and update their profiles as their situation evolves.
Lenders have the option to browse these stories and can award Pertuity Bucks to borrowers who they find most compelling – for example, those borrowers who return to the website and update their profiles to share successes, such as starting a small business or earning a coveted degree.
Pertuity Direct is founded by executives with extensive experience in banking and financial services, including decades of experience from leading financial services firms such as Capital One, PNC, and E*TRADE FINANCIAL. Pertuity Direct is the culmination of Kim Muhota’s vision to simplify financial services for the main street consumer.
Here is the official press release:
Pertuity Direct Launches Next Generation Social Finance Platform
Company Brings Together the Advantages of Capital Markets, Social Networking and Traditional Banking
Vienna, VA, January 22, 2009 – Pertuity Direct, an online consumer financial services company built on the foundation of mutually responsible banking, today announced the launch of its next generation social finance platform. Pertuity Direct’s platform enables borrowers and lenders to come together in a social lending network to obtain smarter financial solutions and better rates. Through the National Retail Fund, members have the potential to earn competitive returns via a regulated investment fund.
By eliminating the traditional bank as the middleman, consumers can now get better interest rates than they would typically experience with banks or credit card companies. “Our model is unique in that it combines the benefits of social lending with the strong underpinning of credit risk management, and privacy” stated Kim Muhota, CEO of Pertuity Direct. “For borrowers, Pertuity Direct does not require any public posting of personal credit information, and for lenders, there’s no bidding, researching or guessing involved. We make the process quick, safe and optimal for both parties.”
Investments are made through the National Retail Fund, a social lending mutual fund that combines lenders’ capital to fund a diversified group of approved and credit worthy borrowers. The money is lent to a large group of borrowers through the fund, and as such creates safety of automatic diversification of investment. Unlike with other social lending models, lender money is not tied up for long periods of time, nor is liquidity tied to individual loan repayment. The National Retail Fund provides liquidity through quarterly share repurchases. Currently, two funds are available via the National Retail Fund: National Retail Fund II and National Retail Fund III. Further details on both funds can be obtained in the prospectus.
“By investing in the National Retail Fund, a lender’s money goes to work immediately at account opening, and funds are deployed to available borrower loans without delay,” said Andrew Rogers, Chairman of the Board and Treasurer of the National Retail Fund and President, Gemini Fund Services, LLC. “With this approach, lender money does not sit idle until suitable borrowers are found and the bidding process concludes. This model makes the social lending process easy and efficient for the investor, and beneficial to the high credit quality borrower.”
As part of the social finance platform, the company offers a ‘Pertuity Bucks’ rewards program to lower or eliminate borrowers’ principal loan balances. Borrowers are given the opportunity to tell their story when they apply for a loan and update their profiles as their situation evolves.
Lenders have the option to browse these stories and can award Pertuity Bucks to borrowers who they find most compelling – for example, those borrowers who return to the website and update their profiles to share successes, such as starting a small business or earning a coveted degree.
Pertuity Direct is founded by executives with extensive experience in banking and financial services, including decades of experience from leading financial services firms such as Capital One, PNC, and E*TRADE FINANCIAL. Pertuity Direct is the culmination of Kim Muhota’s vision to simplify financial services for the main street consumer.
Pertuity Direct Review
Pittsburgh, PA., Pertuity Direct has launched operations with the blessing of the Securities Exchange Commission (SEC). This startup, founded on a value of “mutually responsible banking” offers many ways to differentiate itself from the many players in the p2p lending market.I’ve long followed microcredit but domestic peer to peer lending is fairly new to me. As someone who, shamefully, still hasn’t moved to online bill paying yet (it’s my new year’s resolution, honest), I’ve been just a smidgen nervous about this fascinating new format to borrow and lend in.
Pertuity Direct eases a neophyte’s fears by offering essentially a “peer to peer” mutual fund, rather than commitment to one single loan holder. For those of you p2p purists, this option is also available.
Pertuity Direct screens borrowers well, requiring a minimum 660 FICO score, but showing that most borrowers have at least a score of 720. Interest rates for borrowers range from 8.9% to 17.9%. Fees for lenders are estimated to be about 3.17%.
For borrowers there are additional advantages, including lower interest rates than many other peer-to-peer sites and no auction process to determine the interest rates. For borrowers this means that loans are funded within 2-3 business days after applying. Fees are relatively low, including a 1-2% closing fee, a $15 late payment fee and a $15 (average) fee for late payments. Borrowers can also benefit from 1% discount for Electronic Funds Transfer payments. Another interesting feature is “Pertuity Bucks” which are given to lenders to award as they see fit to responsible borrowers. These can only be awarded to borrowers in good standing, but are applied to the loan to pay down the balance. (When was the last time any creditor rewarded you for paying your bills on time?)
There are some nice perks to being a lender on Pertuity Direct as well. Pertuity allows for monthly or quarterly automatic deposits into your account from your bank account. They also allow you to withdraw your funds early (before one year) at a fee of two percent.
Pertuity Direct is managed by a team armed with credentials that would impress anyone in the business. CEO Kim Mushota spent 11 years with PNC, and Lisa Lough, the VP of Marketing came by way of E*Trade. The Senior VP of Finance, tom McNally comes from Capitol One.
My greatest complaint is that Pertuity Direct does not yet appear to be “Mint.com” compliant; meaning I can’t view my Pertuity Direct investments inside my mint.com financial overview. (Why can’t everyone just get along and play nice?)
Sources
http://www.wiseclerk.com/group-news/countries/us-pertuity-direct-launch/
http://prosperlending.blogspot.com/2008/12/pertuity-direct-to-launch-immediately.html
http://pertuitydirect.com/About/News/default.aspx
http://www.netbanker.com/2009/01/new_peer-to-peer_lender_pertuity_direct_nears_launch.html
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:
Prosper
A Prosper scam: The story of Jessica Wolcott - This also happens to be the most read story of 2007 as well.
PayPal competitor Revolution Money Exchange offers $25 sign-up bonus
How does Prosper compare to other investments?
Why does Revolution Money require my social security number?
Borrowing money to lend on Prosper: Wise or Foolish?
P2P lending review: Best of 2007
Prosper: A hands-on education in risk management
Eleven perspectives on P2P lending - this is my favorite article of the year
Fynanz to tackle peer to peer student loan niche
When to bid on Prosper loans
Why would a borrower use Prosper instead of a traditional bank?
P2P Lending Carnival #4
What effect would a recession have on the Prosper marketplace?
Revolution Money Exchange improves referral program
Peer to peer lending in Canada - CommunityLend
We look forward to 2009 and the many positive changes it will bring to the p2p lending marketplace. Happy New Year!
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:
- 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.
15 Most Popular Articles of 2008A Prosper scam: The story of Jessica Wolcott - This also happens to be the most read story of 2007 as well.
PayPal competitor Revolution Money Exchange offers $25 sign-up bonus
How does Prosper compare to other investments?
Why does Revolution Money require my social security number?
Borrowing money to lend on Prosper: Wise or Foolish?
P2P lending review: Best of 2007
Prosper: A hands-on education in risk management
Eleven perspectives on P2P lending - this is my favorite article of the year
Fynanz to tackle peer to peer student loan niche
When to bid on Prosper loans
Why would a borrower use Prosper instead of a traditional bank?
P2P Lending Carnival #4
What effect would a recession have on the Prosper marketplace?
Revolution Money Exchange improves referral program
Peer to peer lending in Canada - CommunityLend
We look forward to 2009 and the many positive changes it will bring to the p2p lending marketplace. Happy New Year!
Pertuity Direct to launch 'immediately after the New Year'
Pertuity Direct is preparing to launch "immediately after the New Year" according to an email they just sent to interested members. They originally planned to launch a couple months ago at FINOVATE but delayed to ensure they met regulatory requirements.
Here is the full text of the email:
As we wrap up 2008, we thought it would be a good time to check in with you and share the great progress we have made as a company.
If you have been keeping tabs on the space, you know that the social lending industry has been pretty interesting over the last two to three months. The guidance that regulators have given with regard to the segment, combined with the fact that consumer loans are still hard to come by, fits perfectly with what we are bringing to market. There is a real need for alternative sources of capital for consumers, as well as new and better investing options. Social lending is a great answer to the problem - and Pertuity Direct is poised to bring it to the mass market.
We are in final preparations to launch immediately after the New Year. All of the pieces are finally in place and we are revving up for Day 1.
We're excited about 2009 and are looking forward to reaching out to you very shortly as we open for business. Until then, we wish you all much joy and happiness with friends and family this holiday season.
Here is the full text of the email:
As we wrap up 2008, we thought it would be a good time to check in with you and share the great progress we have made as a company.
If you have been keeping tabs on the space, you know that the social lending industry has been pretty interesting over the last two to three months. The guidance that regulators have given with regard to the segment, combined with the fact that consumer loans are still hard to come by, fits perfectly with what we are bringing to market. There is a real need for alternative sources of capital for consumers, as well as new and better investing options. Social lending is a great answer to the problem - and Pertuity Direct is poised to bring it to the mass market.
We are in final preparations to launch immediately after the New Year. All of the pieces are finally in place and we are revving up for Day 1.
We're excited about 2009 and are looking forward to reaching out to you very shortly as we open for business. Until then, we wish you all much joy and happiness with friends and family this holiday season.
Lending Club and Loanio present at FINVOATE 2008
Two dozen companies including Lending Club and Loanio presented at FINOVATE 2008 in New York City today. Netbanker reported on the various presentations throughout the day.
Of course, the big news is Lending Club re-opened to lenders today. They also opened the first secondary market for p2p loans. According to Netbanker's report of the presentation, Lending Club has "been experiencing a 2% default rate and have been approving 14% of applications received."
As for Loanio, Netbanker's Jim Bruene reported, "Solomon walked the audience through the Loanio loan application process emphasizing the option to have a co-borrower, a first for a U.S. P2P lender, and the optional Platinum loan listing, which includes a host of verifications to give lenders more assurance the borrower is being truthful with their application."
Our review of Loanio is here. Loanio was a last-minute addition to FINOVATE after Pertuity Direct delayed their launch to ensure they meet regulatory requirements.
Of course, the big news is Lending Club re-opened to lenders today. They also opened the first secondary market for p2p loans. According to Netbanker's report of the presentation, Lending Club has "been experiencing a 2% default rate and have been approving 14% of applications received."
As for Loanio, Netbanker's Jim Bruene reported, "Solomon walked the audience through the Loanio loan application process emphasizing the option to have a co-borrower, a first for a U.S. P2P lender, and the optional Platinum loan listing, which includes a host of verifications to give lenders more assurance the borrower is being truthful with their application."
Our review of Loanio is here. Loanio was a last-minute addition to FINOVATE after Pertuity Direct delayed their launch to ensure they meet regulatory requirements.
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