If you've ever used ebay, you would be familiar with the feeback system. I assume this site will have a feedback system similar to ebay.

A person might not have the best credit rating, but they might have built up a history of good feedback because they have borrowed and paid back on time in the past.

Clearly there is a market for people looking for loans, and I think this is an example of a business that can bring lenders and borrowers together, and succeed.

Maybe it will fail? I dunno. I just really enjoy examples of innovative businesses. It beats talking about someone and how they just launched a new TGP. :winkwink:

Interesting, but people lending using this system are just asking to get fucked...

I really like the idea!!!

ok... the point is that there is never a shortage of commercial lenders. thats a fact. if someone truly has "good credit" by a lenders standards, they should never have trouble borrowing money.

those lenders compete with each other for the business and to make the loans and its a highly competetive game from a lenders standpoint... so much so, that many big mortgage companies have restructured their business models so they are not dependent on interest rates and make money on mortgage insurance for the loans they write and on other financial instruments.

the idea of a bunch of people getting together to lend money to each other is nice if you buy into the idea that you can't get a great deal if you are qualified anyway (basically you have to head down the conspiracy route) - you can be dead broke, have shitty credit and buy a BMW right now. 18 year old kids with no credit history get flooded with credit card offers.

so what i am saying is that money is always out there to borrow from traditional lenders. its everywhere. lenders are looking for qualified borrowers and there is a lot of competition to give you the best deal... that would mean that people on this site would be somehow competing with traditional lenders which, unless you are motivated purely by philanthropical reasons, you would be making a shitty investment (lending money) and none of these guys will ever do it as well as a traditional lender, manage the risk as well, be able to absorb the bad loans and do it for the best rates.

if a person can't get a great deal on a home loan for example from a bank or mortgage company, it would be hugely irresponsible for a private investor to loan that guy money. he would have to adjust the numbers to cover the risk - bigger down payment, higher interest etc and always be on par with what a traditional lender would offer.

Citi Bank or Wells Fargo or Bank of America does not pull their interest rates or lending criteria out of their ass. They have complex risk assessment models and are great at knowing who is a good risk and who is a bad risk. A site like this in my opinion is nothing more than a naive, utopianistic view of how the financial world works and someone who would lend money in this way is irresponsible and naive as well.

nice good luck1

and dont get me wrong... i think something like this makes sense for high risk lending. there is a lot of money made in that game. particularly in commercial properties. i just dont see how it makes sense to try to be an alternative to traditional lenders for people "with good credit".

I don't know, but the company was started by people who basically are traditional lenders.

Either way, I thought this was an interesting concept for a business, and I'll be interested to see how well it does.

As far as delinquent borrowers go,

"Here?s the really clever bit. An individual lender doesn't lend to an individual borrower because that?s too risky. Instead a lender lends their money across at least fifty Zopa borrowers, and similarly a borrower borrows from a group of Zopa lenders. So the risk is well and truly spread."

Great idea: I'd rather lose 1% of my return than be the 1 person in 100 that doesn't recover ANYTHING. :)

Nice idea.
How do they prove the last one though?

On other parts of their site that say that if you're lending more than GBP25,000 at any one time then you're considered a commercial lender by the government and you'll need to buy a licence. I presume that's what rule #4 means.

50 online business ideas...