The private-placement investment that CommunityLend received was funded by a number of angel investors and a fund that makes institutional investments. Wildlaw Capital Markets served as an agent for this latest round of venture capital. CommunityLend said that it would use the funds to scale up the company’s loan originations, loan adjudication, and loan servicing operations, in a blog post entitled “CommunityLend raises $1.5M to scale operations.”

The company has developed a number of new partnerships during the last year that the company hopes will push loan origination growth. CommunityLend CTO John Philip Green commented on the company’s blog that, “CLH has signed several strategic channel partnerships recently, including one with Canada’s $6B used car marketplace AutoTrader.ca, announced in December. We have also partnered with over 30 home renovation companies through our subsidiary FinanceIt.ca to provide sales financing to that $30B industry. In the few months since launch, we have aligned FinanceIt.ca with HomeStars and StrengthFinance to serve more home improvement companies.”

CommunityLend, in operation since February of 2007, aims to “change the rules of lending” in the country of Canada. The service allows borrowers to get loans from other individuals and from institutional investors with the goal of providing more competitive rates to borrowers. Michael Garrity is the CEO of the company; Colin Henderson and John Philip Green are co-CTOs; Tim Gleeson is the company’s COO.

This article (CommunityLend Attracts C$1.5 Million in Venture Capital) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

In a short blog-post on their site titled “Welcome Quebec,” the company said “Starting today, Lenders and Borrowers from Quebec can now participate in the CommunityLend online lending system.”

Before last week’s announcement, the company was only operating in the province of Ontario. Since each province has unique lending regulations, the company must ensure that it is in compliance with all local lending laws before opening up to lenders and borrowers in that province. This is very similar to how Lending Club and Prosper Marketplace only operate in specific states because of lending legislation which varies on a state-by-state basis.

CommunityLend’s business model is very similar to the two major peer-to-peer lending companies in the United States, Lending Club and Prosper Marketplace.  On CommunityLend’s website, the company describes itself as “an online community where people can lend money directly to other people in a safe and secure way. It is an exciting and unique lending service for Canadians that will revolutionize the way lending works in Canada.”

CommunityLend differentiates itself from Lending Club and Prosper Marketplace by offering users the ability to create and join “communities”.  CommunityLend describes the feature on their website by saying, “in our Community area, you can create Communities which reflect your real life communities and which can help identify your unique community financial needs and Loan performance to interested Lenders.”

This article (Canadian Peer-to-Peer Lending Company CommunityLend Now Available in Quebec) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

CommunityLend is most like its American cousin Prosper in that borrowers create loan listings for $1,000 to $25,000 Canadian, set a starting interest rate (which must be above a minimum rate for their credit rating), and add some information about why they need the loan. Lenders bid in a competitive auction to determine the final interest rate at which a loan will be issued. CommunityLend provides the borrower’s credit rating (AA, A, B, or C), along with an “affordability rating”  and a “stability rating” (both 1-5), which indicate the borrower’s ability to afford the loan, and the relative stability of the borrower, in terms of employment, residence, and marital status. With these three simple ratings, CommunityLend has provided useful and easily understood metrics that should help lenders make decisions commensurate with their appetite for risk.

Interestingly, CommunityLend has chosen to mirror Prosper by offering their own take on Prosper’s “Groups” concept, which they appropriately call “Communities“. The idea is that communities of like-minded borrowers (quilting circles, book clubs, hockey teams) will exhibit higher responsibility in loan repayment than unaffiliated borrowers. Prosper‘s implementation of this structure (which differed in that cash incentives were offered to group leaders) was eventually cut drastically and all but removed from the web site.

On the lending side, CommunityLend is open to both individual and institutional accredited investors living in the province of Ontario. The minimum bid amount is C$100, and bids must be made in C$100-increments. Individuals are also prevented from bidding more than 10% of the loan amount, which seems like a ham-handed way of encouraging diversification.

Borrowers pay a loan closing fee of 1% to 2.5%, depending on their credit grade, with a minimum fee of $75. Lenders pay an annual administration fee of 1% of the outstanding principal balance of all loans held; this fee is extracted on a monthly basis.

Congratulations to the CommunityLend team for receiving regulatory approval, launching their site, and being the first properly regulated peer-to-peer lending site in Canada.

This article (CommunityLend Launches Licensed Peer-to-Peer Lending in Canada) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

This is probably an indication that Prosper is preparing their site to relaunch with the loan securitization model pioneered by Lending Club in 2008. Other expected changes include the introduction of “open market” loans (pre-funded by other originators) and  a secondary market offered through Folio Investing.

Aside from Lending Club and Pertuity Direct, who operates a mutual fund-like P2P lending model, a relaunch would make Prosper the 3rd active peer lending business in the US. Neither Loanio, who shut down shortly after Prosper last fall, nor IOU Central, who opened in Canada but then announced plans to open in the US, has even filed a registration statement with the SEC.

This article (Prosper Readies for Relaunch) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

MicroPlace was started by Tracey Pettengill, who is also the co-founder of the Silicon Valley Microfinance Network and was previously CEO of 4charity, a company whose product is “Web-based software that automates the corporate philanthropy process”. Pettengill started MicroPlace back in 2005, and faced with tough regulatory challenges, convinced eBay to lend expertise and resources.

Several months later, in March of 2007, eBay’s CMO, Gary Briggs let slip that eBay had purchased MicroPlace and was lending resources to the fledgling business to get it off the ground.

Once the site launches, investors on MicroPlace will choose a microfinance institution (MFI) to lend through, designate the amount they wish to lend, and the loan will be securitized and return a modest interest rate to the investor. Interest should be in the 3% APY range.

We’ll be anxious to see how MicroPlace looks when it finally comes out, and how they differentiate themselves from frontrunner and media darling Kiva.

This article (eBay’s MicroPlace Readies for Launch) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.