When the Jump Start Our Business StartUps (JOBS) bill was passed in April 2012, donation, equity, and lending based crowdfunding platforms rushed to fill the new financial space. The rules of the JOBS bill were scheduled to be finalized by January 1st 2013, however after several delays and SEC Chairman, Mary Shapiro’s, decision to step down this month it may be another year until the JOBS bill takes effect. P2P Lending News took a look at what peer-to-peer organizations will thrive and who will lose due to this slow regulatory process.

The Winners:

Peer Lenders: Peer Lenders that were operational before the JOBS bill was introduced are able to operate despite the legislative process. Prosper.com (launched 2006), LendingClub (launched 2007) and Rebirth Financial (launched 2010) have a corporate structure that allows them to operate within current industry regulations. These companies are able to capitalize on the attention being given to the peer-to-peer industry while other platforms are waiting on the JOBS bill.

Donation Based Models: Similarly, donation based models have been able to capitalize on the increased media attention to the corwdfunding industry. Donation models remain unaffected by the JOBS bill so companies such as Kickstarter, Kiva and Indigogo are operational and growing rapidly.

Small Business Loan Aggregators: Lendio, BoeFly and OnDeck meet the lending needs of small businesses that need institutional loans. Loan Aggregators represent a unique space in alternative financing and have gained exposure as the JOBS bill continues to play out.

The Strugglers:

Lending and Equity based models: Lending and equity based models, which gained a lot of traction and excitement in April, remain stagnant as the SEC and FINRA struggle to hammer down regulations. Companies such as SoMo Lend and EarlyShares, both founded in 2011, are still waiting to launch and may suffer as the regulatory process drags out.

CFIRA: The CrowdFund Intermediary Regulatory Advocates (CFIRA) generated a lot of enthusiasm and excitement when the JOBS bill was introduced. However, CFIRA lacks industry experience and currently has no board member with an operational platform. After alienating donation based models and established peer lenders (such as Prosper.com and Lending Club) CFIRA is having trouble maintaining its early enthusiasm.

Conclusion:

The JOBS bill will relax regulations for all lending, equity and donation based organizations and the slow regulatory process has been frustrating for all peer-to-peer organizations. The organizations with the experience and corporate structure to operate outside the JOBS bill are thriving. The organizations that are unable to operate before the JOBS bill goes into effect are loosing traction that may ultimately affect their ability to lend to small businesses.