Blake Schwendiman's Blog and Blook

I have been fascinated with the long tail since I finished reading the book last year. It's an amazing concept that I see over and over on the Internet. Just recently I found a web site called Prosper. This is the long tail of lending. Basically Prosper is the lender, but people like you and me can participate in borrowing and lending through this service.

As a lender, you fund your lending account with money from your bank, then you can search through potential loan opportunities. Many borrowers are consolidating debt, funding businesses or doing home improvements. Each borrower fills out a loan profile and then you (as a lender) can look at the borrower's credit rating, debt-to-income ratio and other important factors to decide whether you want to lend to that particular borrower. The cool thing is that you only lend a fraction of the loan. You may only lend $50 toward a $10,000 loan. You can participate in lending, but you don't have to commit to large amounts or expose your entire amount to a single borrower.

I've only known about this service for a short time, but it seems like an interesting way to diversify one's investments. Prosper has been around long enough for small groups of investors to form online teams and communities so there is plenty of helpful information available on the web site.

I don't know much about borrowing on Prosper, but it looks like it's pretty much the same as getting an unsecured loan through a bank. They will do a credit check and the other due diligence required to reduce the risk of their lenders, so it's not necessarily easier than getting a bank loan but it may be another avenue for finding money for your next venture.

I'm interested to learn if any of you have used Prosper and if so, what are your experiences?