Participate as a lender or borrower in an iTulip.com Community Prosper Lending Group?

[FRED]

To address the issues that The Boston Globe has addressed in its four part series Debtors' Hell on the abuse of indebted American citizens by credit agencies, collection agencies, the court system, and law enforcement, we are conducting a poll to explore one of the ways that the iTulip.com Community can become part of the solution. Our idea is to use Prosper.com, America's first people-to-people lending marketplace. If there is enough interest, we will create a new Prosper lending group called iTulip.com Community for the purpose of attracting both borrowers and lenders in order to provide an alternative to the bank and credit card lending system for both borrowers and lenders in the iTulip.com Community. Borrowers can request unsecured loans from $1,000 to $25,000. Lenders can lend as little as $50 or as much as $25,000 toward a loan request by a member. Please read the details and vote below. You can vote as a lender, borrower, or both.

Prosper, Inc.

Prosper, America's first people-to-people lending marketplace, was created to make consumer lending more financially and socially rewarding for everyone.

The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper's online auction platform.

People who want to lend set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. People who lend can easily diversify using "standing orders", which automatically make many small loans to different borrowers.

In addition to criteria commonly used by institutional lenders, such as credit scores, people who lend can consider borrowers' group affiliations. Groups on Prosper are critical to bringing people together for the common goal of borrowing at better rates. Groups earn reputations according to their members' repayment records. Groups with successful repayment histories should attract more lenders offering lower rates.

Borrowers create loan listings for up to $25,000 and set the maximum rate they are willing to pay a lender. Then the auction begins as people who lend bid down the interest rate. Once the auction ends, Prosper takes the bids with the lowest rates and combines them into one simple loan. Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrower and lenders.

Prosper's rigid privacy policy reflects co-founder and Chief Executive Officer Chris Larsen’s longstanding history as an advocate of stringent consumer financial privacy protection laws and practices. Prosper does not sell, rent, or share members' personal information with third party marketers. Prosper members are in control of how much personal information—if any—is revealed on the website and with other members. Prosper's security and identity verification systems are state of the art, and consistent with those used by banks, brokerages and institutional creditors.

Prosper generates revenue by collecting a one-time 1% fee on funded loans from borrowers, and assessing a 0.5% annual loan servicing fee to lenders. Backed by Accel Partners, Benchmark Capital, Fidelity Ventures, and Omidyar Network, Prosper has raised approximately $20 million. Prosper's marketplace platform is patent pending.

Borrowers

Borrow money from people just like you. You post a listing requesting a loan, and other people bid for the privilege of lending you money. Our job is to make sure everything is safe, fair and easy. Click here to see how it works.

Lenders

Lending money directly to people is a great way to earn a fair return. And when you make lots of small loans rather than one or two big ones, you spread your risk out and ensure a more reliable return. It's called diversification and the pros do it every day. Click here to learn how it works.

[Chris Coles]

Re: Participate as a lender or borrower in an iTulip.com Community Prosper Lending Group?

Some of you already know, I am what many call an an inventor; a man with ideas. (EJ has some knowledge of my standing in this field). While I do have some other attributes, I want to concentrate upon the progression of people like myself that have taken the plunge to follow this particular road. I applaud the idea of Prosper Inc. and the equally good thought to create an itulip community related to that aiming point. But Prosper does not address the problems of first level investment into ideas; it addresses the problems related to short term lending where either there is already an income, or that such income is easily realizable. In my humble opinion, taken from many years addressing the problem of funding ideas; ideas need capital not loan.

We are all familiar with the university employing people to look at the long term research needs of our respective communities. Universities have been in existence for centuries and the funding needs as such are well recognized and understood. What is not well recognized is that, outside of universities stands the great bulk of what you might describe as the second level thinkers in your society; inventors. People that take an initial thought and grapple with the problems surrounding taking that initial idea to a realization. The business of taking thought to new product.

Inventors have all the same financial overheads related to the professor employed by the university; but no recognized funding mechanism. Yes, in some ways that old maxim; necessity is the mother of invention holds very true, but even by any reasonable standards, no one expects something for nothing. Today, society expects a steady stream of new product, but fails to see any connection between the concept of a university requiring funding to fulfill its remit, and that the same remit has to apply to invention outside of that university.

During May 1994, I first addressed this debate by mapping out some thoughts that related to the, (at that time proposed introduction), of what were described, here in the UK as Venture capital Trusts. I sent that to the Bank of England and the Department of Inland Revenue and generated some discussion with the Bank's Industrial Unit. In 2004 I returned to this debate and created the paper; A Capital Spillway Trust that outlined rules for such investment. Now, in 2009, this has now been incorporated into a new book: The Road Ahead from a Grass Roots Perspective. You can read a copy here: http:/www.chriscoles.com/page3.html

I had intended to use the royalty income from telecoms patents I have been granted to put my own money where my mouth is as a trial of my own thinking, but without a capital base of my own, the royalties are elusive. I simply ask the itulip community to give some thought to the creation of a trial of my thinking for A Capital Spillway Trust.

I believe the long term problem in our societies is not access to loan, but instead a recognition that much of society today is grossly under capitalized; particularly at the grass root job creation level. The surplus capital instead, is used to lend excessively, producing the problems addressed by the likes of The Boston Globe and Prosper; and, dare I say it, itulip itself. I will welcome others input to such a debate.