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Thread: P2P Lending?

  1. #1
    Amen P-O's Avatar
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    P2P Lending?

    http://en.wikipedia.org/wiki/Peer-to-peer_lending

    For example:
    www.prosper.com
    or
    www.lendingclub.com

    I know we have some investment tycoons on here...Has anyone tried this as a way to make some money?

    Is it legit/safe/recommended?
    Violence is never the right answer, unless used against heathens and monsters.

  2. #2
    a cantori Perdix's Avatar
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    I only do in person lending to people I trust and know who will succeed (and can oversee/guide, no micromanagement though, just guidance) -- minimizes risk and reduces the amount of time money is tired up (depending). Not knocking online P2PL, although there are many variables out of your control. If you do your research, and when I say research I mean goddamn good research you'll come out on top. Here's the key, a business need to be "investor ready" before VCs (or in this case P2PL) will (and definitely should) give them any money. Investor ready (in my book) means that a business has a stable flow of revenue, is legitimate legally (and will be for the foreseeable future) and has good potential to expand -- ideally, the business has accrued enough operating capital to not need a loan, but would rather go for one for linear/exponential growth. Think really successful restaurant that has marginal profit margins and wants to open up another, and doesn't want to use a bank for some reason.

    So, if you're thinking about doing P2P lending: research is critical... any emotions or fuzzies need to be eliminated with extreme prejudice. No "ohh my homemade pottery is so lovely" think more... "cost efficient supercritical CO2 extractors for CO's booming concentrate market"... When I say research, drive to the business's HQ... it could all be a front with fake paperwork/website/socials/docs...

    I actually drove to a business that I was about to invest in (claimed to produce extremely electrically efficient LTC ASIC's) and it was a complete fraud, a scam... but man, their customer service and professional website, along with pcb design printouts, specs and photos of office interior could have fooled anyone. A few weeks later another aspiring LTC ASIC producer contacted me (because the owner of the company saw my post) looking for an investment, he was in a one of CO's high tech towns, I can't really talk about it (non disclosure agreement). But he was legit, like... goddamn I wish I could talk about this. Let's just say he was a very cool and energetic guy that used to oversee electric design for a very major corporation.

    I wanted to start a supercrit extractor fabrication business but noooooo.... a member on this site walks a higher moral path than I (just kidding, love yah latch, kinda why I do). Instead of rolling solo (or finding another trustworthy partner) I decided to invest in a blooming one.

    If you have the cash -- you're looking to make some money right.... (?)-- why not start your own business? Dude... I'm like twenty and own three ($0 in debt, comfortable in the green), you have far more crystalline-knowledge/life-experience than I, it would be easy. It's all tenacity, willpower, supply, demand and intelligence. Find the demand, find a way to provide the supply... market market market, when you get fucked or hit a rock don't quite, persist. Repeat. If your business fails move on.

    If you're looking to do something more humanitarian, check out: http://www.kiva.org/lend

    It's a brilliant site designed to help grow businesses in impoverished countries via microloans... keep in mind these people have one hell of an incentive to fulfill their contract. Out of necessity births innovation.

  3. #3
    Amen P-O's Avatar
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    @prometheus Thanks for the considered response.
    My issue is that I have money to spare, but not a lot of time. I'm looking to research something up front, drop my money in, then forget about it for a while.

    I'm still working my way through school, so starting a business would probably be ill advised at the moment.


    I looked at the kiva thing, it's nice, but it seems that all the interest on the loan goes to something called a "field partner" (i.e. the local muscle/debt collector).

    Supposedly according to the lendingclub website, there's an "automated investment" option that throws your money in all different directions with the hope that you end up with the average return on your investment (they give a number like 6-8% or something). If the information on the website is accurate, I'd be happy to go in with them, but it seems risky to me to just give my money to some website without hearing a positive review from a real person.

    Like your anecdote indicates, it's easy to sell bullshit over the internet.
    Violence is never the right answer, unless used against heathens and monsters.

  4. #4
    Tsundoku LordLatch's Avatar
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    @prometheus

    Perhaps your next scheme. I'm interested in making a buttload of money and am capable of a ridiculous array, but I'm also annoyingly honest and benevolent.

    15 years ago, I would have ponced on any business model without regard for the persons involve. A friend of mine and I, and my sister, were going to purchase and portion pure dextromethorphan hydrobromide and sell it to children. That never came to fruition as none of us were self starters.

    Years before that, I wanted to put together a team of vigilantes to invade drug houses, kill the people, destroy the drugs, and fund our operation with the money. Rinse and repeat. Needless to say(then why are you saying it!?), I was far darker then. I would have never taken part of that while in the Army and by the time I got out of the Army, I had a family. Another NoGo..
    That's my poop stirrin' stick- Don't touch it! You don't know which end is the handle..

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