When blow dry bars started popping up across the country recently, Jennifer Johnson saw a new opportunity and a way to refresh her 17-year hairdressing career. She decided to add a mobile service to her current salon, Pro Do Blow Dry Bar, based in Salt Lake City, Utah. Mobile blow dry bars bring the hair salon experience to customers and are particularly popular for events such as birthday parties and weddings. “I knew with everybody craving convenience these days it would take blow dry bars to the next level,” Jennifer says.
Jennifer wanted to take her business on the road, but was just shy of the capital she needed for this business expansion. She visited her local bank and presented a “bulletproof” application and business plan as part of her loan request, but was rejected, much to her surprise. She didn’t give up, though. She explored other financing options and came across Prosper. She applied for a loan online through Prosper to launch her mobile business, was quickly approved and had her money in a few days.
With the loan, Jennifer bought a 40-foot bus, which she named “Audrey,” and renovated it. She decked it out into a salon on wheels with three stations for hair, complete with mirrors and shampoo sinks, a makeup station, posh wallpaper and lighting. Then she took Audrey on the road. She and her team traveled 1,638 miles from Salt Lake City, Utah, to Nashville, Tennessee, and back, providing everyone from students and stay-at-home moms to busy executives with mobile blowouts, hairstyling and makeup along the way. Jennifer is thankful she was able to expand her business to be mobile with the help of marketplace lending.
When Sarah Thomas, a single mother, wanted to provide her young son with a better life, she decided to pursue a Master’s in nursing. She had high hopes for their future, but she found herself instead in the American Dream gone wrong. “I pursued an education and ended up with a ton of financial debt,” says Sarah.
That’s when Sarah turned to the Prosper community to help her manage the financial burden. With a loan through Prosper, Sarah was able to consolidate her high-interest debt and take control of her finances. According to Sarah, taking out a loan through Prosper was “the easiest most streamlined process I have ever had.” Now, instead of focusing on paying off debt, Sarah is enjoying a successful career as a nurse practitioner, having graduated with Associate’s, Bachelor’s and Master’s degrees in nursing.
Sarah also found personal happiness through her new career. She met her husband at the hospital where she works and he adopted her now 11-year-old son. Now, Sarah and her husband are thinking about the next big steps in their lives. They want to buy a new home, expand their family and enjoy life. While they are still dealing with a financial burden, according to Sarah, a loan through Prosper gives them an “attainable way to pay off debt” so they can focus on pursing new dreams and goals.
Prosper Marketplace just closed out our first quarter and we’re very pleased to report that it was our strongest yet. In the first quarter of 2015, Prosper facilitated a record $595 million in loans through the platform, up 200% from the first quarter a year ago. We attribute this to the increasing awareness of Prosper combined with the rapid growth across the entire consumer marketplace lending industry. On the borrower side, we continue to see more people turn to us for access to three types of personal loans (debt consolidation, large purchases and business loans based on personal credit). They are attracted by the competitive rates and convenience over traditional lending. We also continue to speak with a variety of investors who want access to this asset class.
As we plan for more growth this year and beyond, our focus remains on building a business for the long term. This means focusing on quality underwriting, people and a scalable technology infrastructure. I often say that underwriting is the most important thing we do here at Prosper, and that continues to be true. Our investors have come to rely on the quality and predictability of our platform. We’re also actively working on building out our verification and customer service teams (among other parts of the business) so that we can deliver the best customer service experience in the industry.
On the borrower side, more and more Americans are turning to marketplace lending to finance their home improvement projects, elective medical procedures, special occasions (such as weddings and vacations), and to start small businesses. People are taking out personal loans not just to get their finances in order, but to make their lives happier and less stressful. One example is Cheri of Grand Rapids, Michigan. She’s a single mom who adopted two children from Haiti. After an expensive four-year adoption process, she struggled financially. With a loan through Prosper, Cheri was able to get back on track.
To help reach new types of borrowers, Prosper Marketplace announced that it acquired American Healthcare Lending in February, now Prosper Healthcare Lending. This incredible group of people, who are now Prosper Marketplace employees, are bringing awareness of marketplace lending as a consumer-friendly financing option for medical procedures. Prosper Marketplace also partnered with a consortium of community banks through Western Independent Bankers to enable them to offer customers access to affordable consumer loans.
We are continuing to build the Prosper team and are always looking for great people. We currently have more than 30 job openings listed on our site, so if you are interested in being a part of what we are building, apply or tell a friend. We have almost 400 employees between San Francisco, Phoenix and Salt Lake City, and will continue to grow well beyond that.
We’re grateful to our loyal borrower members, investors and partners and look forward working with all of you in the future.
From April 16 – 21, Prosper Marketplace sponsored a study of 213 American females between the ages of 25 and 54 from MarketCube, a research panel company, about their experiences trying to conceive a child with fertility treatments.
Each respondent had to meet the following criteria to participate:
Between 25 – 54 years old
Either actively trying or have tried to have a child and experienced difficulty conceiving (defined as at least six months of trying prior to pursuing treatment)
Are actively going through or have gone through fertility treatments
According to the CDC, 12 percent of women of childbearing age (15-44) have received treatment for infertility – a total that equals 7.3 million U.S. women. Even considering this scope, though, it’s exceedingly rare for health insurers to cover the majority of the cost incurred by infertility treatments. In many cases coverage at all is a rarity.
Just 15 states have passed laws that require insurers to cover infertility diagnosis and treatment, while an additional 13 states have laws that require insurance companies to cover infertility treatment. According to the American Society of Reproductive Medicine (ASRM), the average cost of an in vitro fertility treatment cycle is $12,400.
Our study found that the majority of women (84 percent of those surveyed) undergo at least two cycles of IVF, and as a result are struggling with the financial implications of infertility. The majority of respondents have incurred considerable debt (especially credit card debt) as a result of these treatments. In fact, our survey found that the financial implications of infertility far outweighed the health or emotional concerns.
Also of note is the large disparity between women incurring credit card debt as opposed to debt from alternative lending options, many of which can offer considerably lower interest rates and more favorable repayment terms than traditional credit cards.
Prosper Marketplace conducted the survey to better understand the challenges that women are facing when it comes to financing fertility treatments. In February 2015, Prosper Marketplace acquired American Healthcare Lending, now Prosper Healthcare Lending. The company, which is one of the fastest growing providers of patient financing, gives Prosper Marketplace the opportunity to bring consumer-friendly personal loan options to people who need to finance their medical procedures.
The healthcare industry is plagued with high deductibles and spotty customer service. We see a huge need for consumer-friendly, competitively priced financing alternatives for people whose elective medical procedures aren’t covered by insurance or fall below the deductible.
BIGGEST CONCERNS ABOUT FERTILITY TREATMENTS
Cost is by far the most significant concern for women undergoing infertility treatment, with nearly 84 percent of respondents saying they were concerned or very concerned about financing treatments.
When we break out by age groups, the numbers shift in some interesting places. While cost remains the single-biggest concern across the board, the younger set is far more concerned with the emotional and societal pressures than older respondents.
NUMBER OF FERTILITY CYCLES
The majority of respondents have completed 2+ fertility cycles to date.
PROFILE OF FERTILITY CYCLES
PERCENTAGE OF COSTS COVERED BY INSURANCE
In a majority of cases, insurance covered less than 50 percent of the total cost of fertility treatments. For more than 20 percent of those surveyed, insurance covered nothing.
PRIMARY PAYMENT METHODS
Fewer than 30 percent relied on health insurance as their primary payment method (top chart refers to whether a payment method was used at all in paying for fertility treatment; bottom chart refers to primary payment method for fertility treatment).
TOTAL AMOUNT OF DEBT FROM FERTILITY TREATMENTS
70 percent of those surveyed incurred some degree of debt from their fertility treatments. Nearly half (44 percent) incurred more than $10,000 in debt from fertility treatments. For younger women (25-34), this jumped to 52.4 percent incurring more then $10,000 in debt. For the same age, more 26 percent reported incurring more than $30,000 of debt.
TOTAL DEBT FROM THOSE USING CREDIT CARDS
Respondents that used credit cards to pay for at least part of their fertility treatment were more likely to incur at least $10,000 in debt. Also of note, less than three percent of respondents relied on peer-to-peer loans, an increasingly popular and effective way to consolidate credit card debt, as a form of payment.
HOW COSTS IMPACT TREATMENT CHOICES
For nearly half of those polled (49 percent), costs impacted the level of treatment they ultimately chose to pursue (less expensive treatment or facility). Almost 34 percent of those women had to stop treatment due to costs.
BIGGEST CONCERNS RELATED TO FERTILITY TREATMENTS
Once treatments began, cost remained the single largest concern – closely followed by the emotional impact of fertility treatments.
REASONS FOR DELAYING TREATMENT
The cost of treatments was also the single largest factor for those respondents that initially decided to delay fertility treatment – nearly 82 percent.
PUTTING OTHER FINANCIAL GOALS ON HOLD
Nearly 70 percent of those surveyed put other financial goals on hold to receive fertility treatments. The primary things put on hold were travel and buying a home.
SUPPORT AT WORK
More than 33 percent of respondents reported their employers to be less than “Supportive” of women’s health issues. Getting time off was the most prevalent issue with those that felt their employers were not supportive.
In February of 2015, Prosper Marketplace announced that we had acquired our first company – American Healthcare Lending (now Prosper Healthcare Lending). Since that time, we’ve learned a lot about the healthcare industry and the opportunity to bring a consumer-friendly personal loan product to people who need to finance medical procedures. As awareness of marketplace lending has grown, we’ve also heard inspiring stories from people who have used a loan through Prosper* to finance medical procedures that were either not covered by insurance or were out of reach due to high deductibles. This includes Scott, who took out a loan through Prosper to fund bariatric surgery that saved his life. He shared his emotional story with us in this video.
The stories of how our customers used a loan through Prosper to help them achieve their goals are inspiring, and we wanted to learn more about the economics of elective procedures, as well as the hurdles people are facing. We decided to start with one procedure that is becoming more commonplace than ever before: fertility treatments. More than 7.4 million women in the U.S. have had them, with 175,000 procedures in 2013 alone at an average cost of $12,400 per cycle.
Working with Market Cube, we commissioned a survey to find out more about the assisted reproduction process and what barriers women face, including how they pay for treatments and what the financial impact is given that only 15 states require coverage for infertility treatments. What we found was compelling, and underscored our belief that marketplace lending can make a positive impact on people looking to finance these types of procedures.
First and foremost, the survey told us that cost was by far the biggest cause of concern for woman considering fertility treatment. In fact, financial impact outweighed the health or emotional concerns for women when seeking treatment. Furthermore, the survey found that 84% of women have concerns about how they can finance their fertility treatment, and one-third had actually delayed treatment for financial reasons.
When it comes to insurance coverage, fewer than half of the respondents relied on health insurance to pay for treatments, and less than 30 percent used insurance as the primary payment method.
The survey also gave us insights into the types of financial burden that can come with fertility. According to the survey, more than 70 percent incurred some degree of debt from fertility treatments and nearly half of those incurred more than $10,000 in debt. Additionally, nearly 30 percent used credit cards, with close to half of those using credit cards as the primary payment method
Overwhelmingly, the survey showed us that when it comes to starting the process of fertility treatments, cost is by far the thing that concerns patients the most. We also learned that today, only 2.3 percent of those surveyed had used peer-to-peer lending as a payment method, bringing us to the conclusion that more awareness is needed about how a marketplace loan can offer an affordable way to manage the costs associated with this and other important medical procedures.
When insurance isn’t an option, loans through marketplace lenders can offer a better way to borrow money than racking up credit card bills. The process is fast and convenient, freeing up time to focus on family building instead of finances.
For a more detailed overview of the report’s findings, click here.
*All loans through Prosper are made by FDIC Member Banks.
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