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Prosper Unveils New Protection for Lenders

by Prosper on 02/14/13

Over the past several months, Prosper has been working with the SEC on implementing an important new protection to offer enhanced safety and soundness for all lenders on the Prosper platform.  We’re very happy to share that we are the first peer-to-peer lending platform to provide all of our lenders further security of assets. This industry-leading protection, along with our recent fundraising efforts and additions to the management team, represent important milestones for our customers.

First, some details on how this works. A new legal entity called Prosper Funding LLC has been established, which is a wholly owned subsidiary of Prosper Marketplace, Inc. Prosper Funding LLC is now the owner of all loans and the issuer of all Notes on the Prosper Marketplace. As a result, all Notes (both new and previously issued) are now fully protected in the unlikely event of a Prosper bankruptcy.

In order to purchase Notes from Prosper Funding LLC, lenders simply need to agree to the new registration agreement. If you have not done so already, you will be alerted to accept this agreement next time you sign into your account. New lenders are automatically registered with Prosper Funding LLC. In addition, you can review a “Risk Factors” section in the Prospectus for information regarding the risks and benefits of this new offering.

Thank you for your continued participation on the platform. This new protection demonstrates our ongoing commitment to bringing best-in-class tools and services to our lenders.


  • James S

    This is fabulous and very forward thinking! Thanks! JMS

  • http://www.ventrue21.net Derrick Lee Bradshaw

    Great!

  • http://twitter.com/cilynx Randy C. Will

    When will Prosper be available again for Washington investors? The longer I can’t invest in Prosper, the more my mindshare and funds get funneled towards LendingClub. =)

  • ProsperLoans

    Hi Randy- we’re actively working with the Securities Division of the Washington Dept. of Financial Institutions, and while we can’t provide specific timing, we hope to obtain approval soon. We’ll be sure to provide another update as soon as we have more information.

  • Dan

    Will this address Texas’s concerns such that lending will be allowed there?

  • http://twitter.com/cilynx Randy C. Will

    Just wanted to say thanks for getting things worked out in Washington. I funnelled the interest that’s been piling up over the last few months back into some new loans. Keep up the good work!

  • George Owletuck

    This is a wonderful opportunity I teach my 8, 12, 17 & 23 year old daughters about.

  • Shirley Pritchard

    A month ago we opened an investment account with Lending Club. A problem that we have encountered is that about 20% of the notes that we buy are “in review” for as long as four weeks and then some of them are denied, thereby tying up our funds without our receiving and interest. Is Prosper any better than this?

  • ProsperLoans

    Thanks for reaching out and your interest in peer-to-peer
    lending. On the Prosper platform, we post notes to investors for
    funding simultaneous with the verification process. While this offers investors the chance to invest funds quickly, it can also mean that some notes get canceled due to a borrower’s inability to verify. This is for the protection of our lenders. One thing we use on Prosper Listings pages that can be helpful is the verification flag. Next to each listing, you will notice a small green or yellow number on the right hand side of each note. This number reflects what stage of verification the borrower is in. Those notes that are in V-3 verification are almost completely verified and are the most likely to post successfully to the platform. We hope this helps!

  • Dale

    I like the concept of peer to peer lending.

    It seems that as the strategy gains more and more popularity, less quality loans are available. Too many investors and not enough borrowers?

    What is prosper doing to address this? Are there any plans in place?

  • long.tail.of.finance

    Why not just only post notes that have been fully verified? I mean, why waste the lenders’ time if the listing might get yanked? What’s the rush to post unverified loan requests?

  • ProsperLoans

    In order to provide the best possible product for both our lending and borrowing customers, loans are funded concurrently as we verify borrower information – this decreases funding time exponentially.


posted in Featured,Lenders,Prosper News 12 comments »

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Notice: Blogs and other materials posted on or linked from this page that use the name "Prosper" generally use that name to refer to Prosper Marketplace, Inc. if published before January 31, 2013 and to refer to Prosper Funding LLC if published on or after February 1, 2013.