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Last fall, San Francisco's Samovar Tea Lounge was in a cash crunch. Co-owners Jesse Jacobs, 36, Paul Fullarton, 36, and Robert Sandler, 33, had recently opened a second store, putting a crimp in Samovar's bank account just when the company needed to order holiday merchandise. There wasn't time to get a traditional bank or SBA loan, and the interest on a credit card cash advance would have killed profits.
So Jacobs obtained two $10,000 loans at 10 percent, each in two weeks flat, on the peer-to-peer lending site Prosper.com. In the year since we wrote about Prosper's debut, the San Francisco company has facilitated $57 million in loans. It now has 260,000 members. Prosper co-founder and CEO Chris Larsen says small-business funding is one of the most popular borrower categories.
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