A new peer to peer lender, Peerform, launched in limited beta last week. Formerly known as Lendfolio, Peerform is the first company to launch in the U.S. in several years looking to go head to head with Prosper and Lending Club.
They are taking a slightly different approach in getting started. With a management team that has a background in the New York banking and hedge fund industry they have access to some institutional investors right off the bat. So, while they opened last week for borrowers, they are currently closed for investors. They are using mainly institutional money initially to fund borrower loans. If you are what the IRS calls an accredited investor then you can request an invitation to invest from Peerform by emailing them.
Launched for Borrowers in Five States
As far as borrowers go, they are open in five states: California, Florida, Illinois, Louisiana and Ohio. The process for borrowers is very similar to that of Lending Club and Prosper. Borrowers will need a good credit score (660 or more) and decent credit history before they will be considered for a loan on the platform. Loans will be accepted for amounts of $1,000 to $25,000 with rates starting at 5.84%. All loans will be for a three year term.
The investment process will be similar to Lending Club and Prosper with a choice between an automated investment plan and hand picking loans. Either way investors will be able to spread their money among many loans. There is no word, though, on when they will open to individual investors. But they told me their intention is to become a true peer to peer lender in the future.
Peerform has raised just over $1million in angel financing and they are not currently seeking venture capital money. They are looking to grow the business slowly but steadily. They are fully aware of the hurdles of SEC registration and are prepared to take on that process when the time is right.
As Many as 20 P2P Lenders
I welcome Peerform to the peer to peer lending industry. We need more than just the two players we have currently. The founders of Peerform believe that as peer to peer lending matures it should be able to sustain many competitors. In the US market alone there should be space for at least 20 companies to thrive within a few years.
Stay tuned for further developments from Peerform. You will read about it here as soon as they open for average investors. They are certainly a company to watch.
