Peer-to-peer lender Prosper Funding LLC is hoping to continue its makeover, this time with a little plastic surgery.
Prosper, one of the largest online marketplace for matching borrowers and lenders, is acquiring American Healthcare Lending, which makes software for doctors and hospitals to offer loans for medical procedures, for $21 million, the company is announcing today.
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- Prosper's deal for Salt Lake City-based American Healthcare is being compared to Lending Club’s 2014 purchase of Springstone, which also funds elective medical procedures and private school education loans.
- Prosper Marketplace ventures to offer a low-cost alternative for elective-surgery loans. The move makes sense for Prosper because elective medical loans are a roughly $20 billion a year market that’s growing about 20% annually, the upside is obvious. The P2P lending platform will be an attractive offer for loan seekers because of the vast amount of sketchy medical financing options that dominated the market for so long, the 12-month teaser rates and high fees that were commonly offered to borrowers will position Prosper as a long-awaited solution.
- A note of interest is that institutions such as hedge funds are the primary buyer of loans through peer-to-peer platforms. Prosper, like Lending Club and its other peers, sells nearly two-thirds of its loans to institutions. They hope to increase public awareness of these lending investment opportunities.