Peer to Peer Lending

This process had been around on the internet for a while but is getting more attention lately. It's a way for new or growing businesses to get capital without going to a bank or lending institution. The site lets a business looking for business money make an offer to pay interest at a rate they think will attract people to lend them that money. Investors will look at the borrower's credit score, purpose of loan, interest offered and repayment term before deciding to loan part or all of what is requested. It's a way for borrowers with poor credit or no collateral to get loans that they would have no chance with a bank, etc.

The investor may get a bigger return than other investments and the interest rate is usually based on the risk associated with the borrower. It's also a way to help startups and struggling entrepreneurs grow a business when they had no other way to finance it. Investors can expect some loans to go bad but the overall high interest rate will usually make the average return still worth the effort. Investors and borrowers can register at sites like... lendingclub.com and prosper.com and many others if you search the web. Never invest more than you can tolerate losing if you select the wrong borrowers.

Barry Thomsen  www.idealetter.com