Fund Do Business borrowers and individual lenders come together on this new site.
By Carol Tice Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Gary Richardson, 40, needs to borrow $25,000 to buy moreinventory for his online eyewear business. He could try a creditcard or a bank loan. But instead, the Locust Grove, Arkansas,business owner is borrowing the money through Prosper.com, a new onlineperson-to-person lending site.
Launched in February, San Francisco-based Prosper offers loansup to $25,000 at a range of interest rates. After three months ofoperation, Prosper has more than 500 loan applicants seeking fundson any given day. Prosper CEO Chris Larsen isn't releasing loanstatistics yet, but he believes his site's eBay-style model ofconnecting individual lenders with borrowers has huge potential.He's not the only one who thinks so--Zopa.com, a similar United Kingdom-basedlending site, plans to enter the U.S. market this year.
Prosper verifies loan applicants' information, runs a creditcheck and assigns a credit rating. And there's no chance a latepayment will cause an interest-rate hike--payments areautomatically deducted from borrowers' bank accounts. Deadbeatsbeware, though: The company turns nonpayers over to collectionagencies.
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