Business Journalism: Multiple Clips

Web site matches
borrowers, lenders

Amount requested: $

Maximum interest rate: | 7

HOW IT WORKS

???STEP 1: Borrowers
register at Prosper???s Web
site, giving the company
access to their credit his
tories and posting infor:
???mation about themselves,
how much they want to
borrow??? up to $25,000
and how much interest
they are willing to pay.
???Some even post photos.

STEP 2: Potential

smmm|) lenders select aloan, say
how much they are wil

ing to invest and the min-

Requested: $3,000.00 imum interest rate they
vill accept.

Lender rate: 5.65%

Time left: Id 20h 6m

5.25% yo
$1,000.00 5.50% ??
$1,500.00 5.65% %
$3,000.00 6.15%

Bids ]
Amount: $3,000.00
Interest rate: 5.50%

Bid Details

Bid Amount:

Minimum rate:

STEP 3: The auction
begins and lasts for as
long asa week, a which
time Prosper gathers the
lowest-rate bids, com-
bines them into one loan
and sets up a payment
system for borrowers.

A new service is cutting banks out of the lending game, matching
loan seekers with ordinary people who have money to lend

By Frank Norton
STAT? WATER

Need a little cash for extra ex-
penses? Go online.

???Adriese Williams did and found peo-
pleall over the country willing to fork
over the two grand he needed for
video equipment.

Williams, 43, a Durham school-
teacher, found his lenders through
prosper.com, an online matchmaker
for borrowers and lenders, whose mis-
sion is to take banks out of the lend-
ing game.

The San Francisco startup was in-
troduced in February by Chris Larsen,
cofounder of online lender E-Loan,
and John Witchel, a technology en-
trepreneur. Larsen describes Prosper
asa place where consumers and small
businesses can ???take back the mar-

ketplace for credit.???

???This is a platform where borrow-
ers and lenders make contact and
make a market,??? Larsen said. ???We
just provide the safety and the tools
for them to do that.???

Prosper functions much like sites
such as eBay, where buyers and sell-
ers of goods meet online, and
match.com, where singles can wink
their way toa date.

???At Prosper, borrowers and lenders
are the ones hooking up. Loan
amounts range from $1,000 to
$25,000, though lenders can bid
amounts as low as $50.

Williams filled out an online bio,
told how much he wanted to borrow
and the highest interest rate he was
willing to pay over three years.

Within four days, he had several

lenders willing to meet his terms. In six
days, those lenders had bid down the
interest rate they would charge him ???
his ???A??? credit rating didn???t hurt.

???Some people say they need a few
bucks, and some people say they've got
a few to give,??? says Williams, 43, who
got his loan in April. ???From what I
see, this just cuts out the middleman.???

???This type of lending is new in the
United States, but a similar site has
had success in Britain after operat-
ing for a little more than a year.

???Clearly there is a market for this,???
said Greg McBride of Bankrate.com.,
which tracks consumer finance trends.
The site gives borrowers an alterna-
tive to credit-card debt or loans from
credit unions or banks,

STAFF ILLUSTI

SEE PROSPER, PAGE 3E TIM LEE AND Mich