$24.1 Million in Loans Facilitated by U.S. Peer-to-Peer Lending Companies in May
Prosper.com and Lending Club, the two largest U.S. peer-to-peer lending companies, facilitated $24.1 million in loans during the month of May, marking another record month for the peer-to-peer lending industry.
Lending Club facilitated 1,704 loans between borrowers and lenders during the month of May, with a total loan volume of $18,532,075. Lending Club saw a 5.7% increase in loan volume compared to the month of April, when Lending Club issued 1,563 loans totaling $17,520,000. Prosper.com facilitated $5,600,451 in loan volume across 807 notes during the month of May. Prosper saw an impressive 11.7% increase in loan volume from its April total of $5,013,591.
The month of May marks another month when both Prosper.com and Lending Club have seen new records in loan volume. Lending Club has hit new loan volume highs during six of the last eight months and Prosper.com has seen positive loan volume trends for more than a year now. Prosper has not been able to hit the highs that it saw before being hit with a cease and desist notice from the SEC in 2008, but the company continues to see monthly growth in its loan volume. April was the first month that Prosper.com saw more than $5 million in loan originations since its peak in 2007 and 2008.
Lending Club continues to lead the way in monthly loan volume. The company benefits from a number of institutional investors that purchase Lending Club loans as investments. During the month of May, Pool Corp announced that it would purchase as much as $2 million in notes on Lending Club. Lending Club’s loan volume was also helped by a couple of bonus offers designed to encourage new investments into Lending Club loans.
Prosper.com continues to lag behind Lending Club in total loan volume, but the company has seen substantial growth in monthly loan volume during the last year. In September 2010, Prosper.com facilitated just over $2 million in loans. Prosper.com has nearly tripled its monthly loan volume in less than a year through a series of compelling bonus offers, a few large new lenders and other marketing efforts. There was actually one investor, “worth-blanket2,” that singlehandedly invested $1.2 million in Prosper.com loans during the month of May.
Prosper.com has issued a total of $236,501,020 across 39,951 notes as of May 31st, 2010 since launching its service in November of 2005. Comparatively, Lending Club has issued $284,933,075 across 28,207 loans since it launched its service in mid-2009.
Both companies continue to post impressive loan volume statistics month-after-month and have a solid regulatory standing with the SEC. Profitability remains a hurdle for both companies. Prosper.com is currently operating with relatively little cash in the bank and is due for another round of venture capital within the next two or three months. There’s no evidence that Prosper and Lending Club won’t receive additional venture capital funding from their investors, but eventually the venture capital faucet will run dry and they will need to be profitable to be sustainable over the long haul.
Update 6/1/2011: Social Lending Network also did a write-up regarding May’s loan volume.
Update 6/1/2011: Prosper issued a press release regarding its loan volume growth.