How Alternate Lending Changed Forever In 2014 - Year In Review

alternative lending 2014From www.spendmatters.com -

The first of course is the rise of alternative lending products that go by such categories as online receivable auctions, private pcard exchanges, and peer to peer or marketplace lending. There are actually several dynamics in one so we will look at each separately.


We know the investor world is in love with consumer peer to peer lending (P2P). Peer to peer lending has become almost a feeding frenzy of activity.


Editor’s Note: While David Gustin highlights the giant leaps forward made by p2p lending platforms like Prosper and Lending Club he also gives a real world breakdown of the pitfalls involved in online business receivables auctions, another market that many investors find intriguing. The cold truth is told by stating that customer acquisition is still scarce in that market, most auctions are still minuscule in comparison to the amount investors that are interested, it's a difficult investment to scale up and defaults are through the roof. Here are our article highlights:

  • Prosper's p2p platform took 8 years to lend $1 billion. It took only 6 months to loan out the next billion.
  • While LendingClub lost more than $23 million in the first nine months of this year, it’s revenues have been more than doubling each year. Their current valuation is at about $5 billion.
  • Peer to Peer lenders currently focus on consumer loans, but many are now trying to get involved in business credit.

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