Both companies had a strong lending month in January. Lending Club led the way with $34.0 million in loan originations, up from $31.0 million in loan originations during the month of December. Prosper issued $10.8 million in loan originations during the month of January, up from $9.5 million during the month of December. Lending Club issued 2,602 loans to borrowers during the month and Prosper issued 1,469 loans.

On a year over year basis, Lending Club saw a 229% increase in monthly loan volume compared to January 2011, when it facilitated $14.8 million in loans. Prosper’s monthly loan volume has grown 322% on a year over year basis compared to January 2011, when it facilitated $3.4 million in loan volume.

At current growth rates, Prosper and Lending Club will hit the $1 billion mark in loan originations sometime between May and July of this year. I previously predicted that Prosper and Lending Club will hit $1.4 billion in loan volume by the end of the year.

January was a relatively slow news month for the peer-to-peer lending industry. Prosper was most active in launching a new mobile site and offering a new IRA investment option for investors.

This article (Lending Club Surpasses $500 Million in Loan Originations, Prosper Tops $300 Million) 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.

However, what many businesses may not realise is that equipment leasing is available for practically any asset, not just computer equipment. There are in fact countless assets that can be leased for business.

What can my business lease?

When it comes to asset and equipment finance, the requirements for leasing are:

-          The asset must be used for business purposes

-          The asset should have a clear and separate title and not be tied to its location (e.g. office fit-outs would not qualify)

-          The asset should not be a consumable (e.g. ink cartridges would not qualify)

-          The asset must not require on road registration (separate vehicle financing is available for business fleets)

This means that the list of leasable items is pretty big. Of course, bear in mind that each individual asset will need to be assessed before a lease is offered.

Consider these assets:

-          Vacuum cleaners for commercial cleaning

-          Compressed air control equipment for construction

-          Hydroponics equipment for agriculture businesses

-          Oil drilling equipment for mining

-          X-ray machines for medical clinics and hospitals

-          Laser hair removal machines for medical aesthetics clinics

-          Coin and note changing equipment for wholesalers and manufacturers

The list goes on!

How do I lease the equipment I need for my business?

If you’re looking to lease equipment for your business, the best place to start is with your equipment supplier. Many suppliers offer vendor finance programs that allow you to apply for equipment financing during the time of purchase so you can work with your trusted supplier and not have to deal with an involved application process. It’s easy to choose the equipment you need and then get approved for financing.

Alternatively, some businesses may be interested in having an approved finance amount before they start shopping. You can apply directly for asset finance and then look for the equipment you need. Some arrangements will even let you draw down on a pre-approved amount so you can bundle your equipment into one leasing arrangement.

From compressed air control equipment to oil drilling machines, what equipment will you lease for your business?

This article (Business Equipment You Didn’t Know You Could Finance) 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.

Social Lending Network reports that the company did a soft launch of its IRA product to a small group of customers in November, but now the account option is available to all investors. Like Lending Club’s IRA option, Prosper’s IRA will be a self-directed IRA that’s managed by a third-party. Prosper will be using Sterling Trust as its partner. Prosper has also placed a $10,000 minimum to open an IRA account.

The big question is whether or not you should use your IRA to invest in peer-to-peer lending. If you have a 401K plan or other retirement plan through your job or business and are already investing in stocks and bonds, Prosper or Lending Club’s IRA option could be a great way to reduce the taxes you pay on peer-to-peer lending. If you’re not already investing for retirement using another tax advantaged account, your IRA should probably be used for something that’s less of an alternative investment. I’m excited about the rates of return that peer-to-peer lending offers, but they have less than a five year track record. Putting money into peer-to-peer loans probably isn’t the investment that you want to bet your retirement on, at least, not yet.

Anyone interested in opening a Prosper IRA can do so at www.prosper.com/ira/

This article (Prosper Announces IRA Account Option) 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.

• Roundup of Social Lending News – January 28, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. We have an interesting cross section of articles this week. I would like to highlight the Prosper review…
• How Do the Efforts of Prosper and Lending Club in Search Engine Marketing Compare? – Internet ventures are dependant to a certain degree to new visitors that are referred to them via search engines. A visitor that did a search on a very specific search term, e.g. ‘get a personal loan’ will have a very high chance to sign up if after that search he is introduced to the Prosper…
• Independent Audit Confirms Prosper’s Industry-Best Returns – In this blog, Prosper announces the results of the independent audit of investor returns by Ashland LLP–the first of its kind in the peer-to-peer industry….
• Why is This E-Grade Loan Paying Just 6% Interest? – I first noticed this in one of my Lending Club accounts about a year ago. It was a C-grade loan that went from 14% and was suddenly paying 6%. I thought it must have been a mistake but when I did some investigating I discovered this 6% rate was indeed correct. How can that be?…
• Thursday’s Webinar Agenda – Remember this Thursday, the 26th, I’ll be hosting a Webinar.  If you haven’t signed up you should do so, it will be very informative! Introduction My background Nickel Steamroller – meaning / history Disclosure The Platform Import Scripts Scaling Issues Undocumented Features Costs of running NSR Tools LendStats approach to finding ROI Statistics Finding meaning filters…
• The Lending Club Secondary Market Access Portal is Back – I wrote a new secondary market access portal today. I am taking a varied approach to getting the data into the system, so we’ll see how it works out. I also added the ability to export the entire secondary market for your own filtering via Excel or any other application you want that supports CSV….
• Roundup of Social Lending News – January 21, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. There was plenty of news items from the UK this week but it was a pretty quiet week…

This article (This Week in Peer to Peer Lending: 1/29/2012) 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.

It’s also interesting to note that the study only contains data dating back to July of 2009, when Prosper revamped its business model. Before that date, Prosper did not place stringent enough requirements on borrowers and made use of a reverse Dutch auction model which caused investors to bid each other down to the point where interest rates made little financial sense. As a result, many early investors lost money by investing in peer-to-peer loans on Prosper, resulting in a class action lawsuit against the company.

Prosper has had gotten its act together much more in the last year, but issuing dishonest, self-congratulating press releases is not a great way to inspire confidence.

Here’s the text of the release:

Independent Audit Confirms Industry-Best Returns of P2P Lender Prosper.com

Industry-first independent audit demonstrates a model for transparency in P2P lending, verifies Prosper’s industry-leading returns

San Francisco – January 25, 2012 – Following a year that ended with 178% year-over-year growth, Prosper, a peer-to-peer lending marketplace for personal loans, today announced that Ashland Partners & Company LLP has released the results of its independent audit of investor returns on Prosper.com. The independent audit represents a first in P2P lending, setting the stage for full transparency and return on investment (ROI) verification.

The report confirmed Prosper’s 10.69% annualized seasoned rate of return, net of fees, for the period of July 1, 2009 through September 30, 2011. This is the first time an accredited, independent organization has conducted a comprehensive audit of P2P lending returns.

Ashland is a leading provider of compliance consultation and verification services to the investment management community, with offices in the U.S., Shanghai, Tokyo and Seoul. Ashland is specializes in GIPS verification and consultation.

“Our investors need the highest degree of confidence in the transparency, accuracy and reliability of our high-yield P2P lending returns,” said Chris Larsen, Prosper’s co-founder and CEO. “We conducted this audit because we believe that high minimum standards, full data transparency and rigorous self-regulation are critical to earning customer trust and protecting the long-term viability of this industry.”

Prosper contracted Ashland to conduct a comprehensive audit of its individual loans and operational infrastructure in accordance with attestation standards established by the American Institute of Certified Public Accountants. Ashland examined a specified Schedule of Performance for the Prosper All Rated Notes by Vintage Month Performance Record for the period July 1, 2009 through September 30, 2011.

Prosper is the only P2P lender to report seasoned returns, which it first reported in October 2011. Seasoned returns are a more conservative and accurate indicator of returns, reflecting a loan or portfolio of loans that has matured enough for the performance to stabilize. This return is thought to more accurately reflect the true underlying return of the asset.

On November 4, 2011, Prosper held the industry’s first P2P Lending Performance Measurement Summit to discuss the need for industry performance measurement standards in the U.S. Prosper senior executives discussed the need for rigorous analytics, full transparency of metrics and a call for seasoned returns in P2P lending. Prosper requested the audit by Ashland Partners & Company to establish the first set of P2P lending standards.

“Prosper is committed to regular audits of its returns to verify our performance and continue to earn the trust of our investor community,” said Joseph Toms, chief investment officer of Prosper. “As the peer-to-peer lending industry continues to experience such dramatic growth, we look forward to continuing to set the industry standard in reliable investor returns, and transparency and accountability.”

For a full copy of the P2P lending industry’s first independent performance report or to learn more about Prosper’s lender returns and competitive personal loans, visit www.prosper.com.

This article (Prosper Hires Auditor to Confirm Investment Returns, Issues Self-Congratulatory Press Release) 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.

Here’s the text of the release.

OSTON, MA, Jan 24, 2012 (MARKETWIRE via COMTEX) — National Family Mortgage, America’s premier peer-to-peer lending solution for home loans between relatives, today announced its support for SlashDeclare, a collaborative movement from innovative financial services companies wanting a more productive, fair and transparent system for everyone. The movement was recently founded by top disruptive financial services companies, Betterment, PerkStreet Financial, and BillGuard.

“We are proud to be a part of the growing SlashDeclare movement and are committed to helping bring transparency and fairness to consumers across America,” said Timothy Burke, CEO and founder of National Family Mortgage. “National Family Mortgage recognizes that high standards, full transparency, and a commitment to helping consumers find a better deal are the keys to restoring confidence in US financial services.”

To demonstrate their participation in the movement, National Family Mortgage created a SlashDeclare web page, which can be found at:

nationalfamilymortgage.com/declare

This declarations page highlights a “Customer Bill of Rights,” that National Family Mortgage believes all of their customers are entitled to, including, “a right to build your own bank.”

“Together with Betterment and BillGuard, PerkStreet is pleased to be spearheading the SlashDeclare movement in an effort to create a better financial services landscape for all,” said Dan O’Malley, CEO of PerkStreet Financial. “SlashDeclare is about reforming our industry from the inside out, and National Family Mortgage is a fantastic addition to the roster of great companies participating in this revolution.”

This article (National Family Mortgage Announces Support of “Slash Declare” Movement) 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.

Here’s how Michael described the webinar on his site:

I’ll be hosting a 45 minute webinar followed by a 30+ minute Q/A discussing the features and tools of Nickel Streamroller. I want to dive into the platform in-depth. We will cover everything from how to find statistically meaningful filters to some of the low level technical details. I’ll talk a little about some of the challenges I’ve had creating the system and where I see it going in the future. I hope to keep the webinar very interactive. I’ll be hosting the audio portion of it via a conference bridge so you can dial in from anywhere, even your car during rush hour traffic. I hope you join me, it should be a fun and information packed hour.

Nickel Steamroller posted an agenda for tomorrow’s webinar here.

Interested parties can register for the webinar at this link.

This article (Nickel Streamroller to Host P2P Lending Webinar) 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.

• Roundup of Social Lending News – January 21, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. There was plenty of news items from the UK this week but it was a pretty quiet week…
• A Snapshot of All My P2P Lending Accounts – Today, I am going to open the kimono, so to speak, and provide an inside look at all six of my p2p lending accounts. The question I get more than any other is about the returns I am getting. This is what nearly every investor wants to know. So, today I will answer that question…
• FICO vs VantageScore – Credit Scores A credit score is a metric used by companies to assess your worthiness to borrow money or your credit risk. Every time you apply for a credit card, car loan, house, or other debt, instrument lenders will request your credit score. These scores are core to the P2P lending business and essentially share…
• Adwords Marketing Activity of British P2P Lending Marketplaces – I did some research on use of Google Adwords in the online marketing strategy of Zopa, Funding Circle and Ratesetter.
  Who is most active in search engine advertising?
  I was surprised to see that Funding Circle is the most active in advertising on Google Adwords.

  The chart shows that Fundingcircle had active ads nearly the whole year, while…

• S&P/Experian Consumer Credit Default Index – Standard and Poors in conjunction with Experian publishes consumer default information every month. This is a fascinating source of information because it gives key indicators to America’s ability to service debt repayment. As to be expected there was a significant spike in default during the peak of the financial crisis. The good news, the default…
• Prosper Running a $1,000 Cash Giveaway – Prosper has a new promotion to start out the New Year. Just provide them with your name and email address and you will have a chance to win $1,000 cash. There is nothing else you have to do to enter. You can also increase your chances of winning by using your special referral link and getting…
• Roundup of Social Lending News – January 14, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. It seems that the mainstream media are most interested in the borrower side of p2p lending, in particular…
• Nickel Steamroller Webinar Reminder – The webinar will be hosted on anymeeting, you can sign up online now: http://www.anymeeting.com/AccountManager/RegEv.aspx?PIID=EB54DA808249 When: January 26th 7:00 PM CST…

This article (This Week in Peer to Peer Lending: 1/22/2012) 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.

Student Loans Are Yours for Life

One of the single most important things to be aware of is that once you take a student loan, there is no escaping it. Unlike other types of debt, such as credit card debt or personal loan debt, student loans are generally not eligible for discharge in bankruptcy. This means that once you have a student loan, it is not possible to ever get rid of it. This is true even if your circumstances change and it becomes very difficult for you to repay the loan. Unless you can show extreme undue hardship, which usually won’t happen unless you become totally and permanently disabled and unable to work, you’ll have to find some way of continuing to pay.

A Co-Signer Isn’t Always a Good Thing

Some students assume that having an adult or parent co-signer help them get their student loans is a good thing. After all, students typically don’t have a lot of credit and they may feel that they’ll be helped out by getting someone with a longer credit history to vouch for them.

Unfortunately, this only works if the parent or other adult co-signer has good credit. A bad credit score from the co-signer can make the student loan interest rate higher than it would otherwise be if the student applied on their own. Before getting anyone to co-sign for a loan, it is therefore important to make sure that person has a good credit score that will actually be helpful instead of harmful.

Greater Need Equals Cheaper Loans

Certain loans, such as government Stafford loans, have a very low interest rate and the government may subsidize that interest while you are still in school. In order to qualify for the most advantageous loans, you will need to show that you have a financial need for them. In some cases, showing a great financial need can even help you to get grants that don’t have to be paid back.

For some students, this can be a challenge because parental income is counted in determining need. Unless you are attending graduate school (instead of undergrad) or are emancipated from your parents, this means that you can be disqualified from the best aid if your parents make a lot of money.

Loans for More Than the Cost of College

Student loan companies will often be willing to lend you more than the actual cost of going to school. Payment for books and even for travel, room and board and other expenses may be borrowed. However, before you borrow more than you need, you should consider whether you want to take on the added debt burden and whether you are comfortable doing so in a student loan that you cannot ever get rid of in bankruptcy should you hit a financial bump. If you aren’t certain, click here to learn more about some loan options to help cover expenses and costs.

This article (What Isn`t Your Student Loan Company Telling You?) 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.

• Prosper Running a $1,000 Cash Giveaway – Prosper has a new promotion to start out the New Year. Just provide them with your name and email address and you will have a chance to win $1,000 cash. There is nothing else you have to do to enter. You can also increase your chances of winning by using your special referral link and getting…
• Roundup of Social Lending News – January 14, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. It seems that the mainstream media are most interested in the borrower side of p2p lending, in particular…
• Nickel Steamroller Webinar Reminder – The webinar will be hosted on anymeeting, you can sign up online now: http://www.anymeeting.com/AccountManager/RegEv.aspx?PIID=EB54DA808249 When: January 26th 7:00 PM CST…
• Lending Club Tweaks Marketing to Promote Range Instead of Platform Average – Anyone that runs an affiliate banner for Lending Club will notice something changed. They are re-tooling how they advertise their returns. Instead of giving a platform average they are explicitly stating a range, which is probably a more realistic way to promote the returns of the platform.  I find it interesting though that the range…
• P2P Lending Predictions For 2012 – I really like this time. The new year lies ahead with crispy, yet unknown innovations. What p2p lending developments might happen in 2012. Here are some personal opinions.
  Last year I failed big time with most of my predictions for 2012 not coming true.
  Deeper integration of mobile (probability <25%)
  Can you use a p2p lending…
• January Portfolio Update – I’ve passed the 10K mark in P2P lending, soon it will be 11K after a pending $250 deposit. It’s been an interesting ramp up.  I am invested in both platforms,  however I started off with Lending Club.  My confidence in both platforms continues to grow. I don’t have the same analytical depth in Prosper that…
• The Large Impact of Early Defaults on ROI – I have been keeping a daily track of my NAR on all my Lending Club accounts now for almost a year. I have also been doing this for my Prosper accounts since they introduced annualized return numbers back in October. During this time I have been able to observe the negative impact that defaults have…
• Taking Estimated ROI to the Next Level – I had my first defaults start to come in the last 30 days.  What’s interesting about this is how the platforms calculate the ROI…  to describe it in one word:  ”jumpy”.  Meaning, you can have a ROI that varies by more than 1% once a default happens.  If your ROI was to be plotted with…
• Roundup of Social Lending News – January 7, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. I have been offline most of this week as I traveled to Sydney, Australia (my home town) and…
• Let’s Get Real About Your New Year’s Resolution – Well, it’s that time of year again! The gym has gotten crowded and our bathrooms and kitchens are sparkling. But whether our resolutions are about health or wealth, many people will find themselves slipping off track over the next few weeks.
  So are you ready to make 2012 the year that you put your finances in…

This article (This Week in Peer to Peer Lending: 1/15/2012) 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.

Anyone interested in registering can do so at http://www.prosper.com/prm/payoffdebt.html. The deadline to enter is January 31^st, 2012.

Here’s the fine-print:

* NO PURCHASE NECESSARY TO ENTER OR WIN. A PRODUCT PURCHASE WILL NOT IMPROVE YOUR CHANCES OF WINNING. INTERNET ACCESS IS REQUIRED TO ENTER. Void where prohibited. Offered and open only to legal residents of the fifty U.S and D.C., who are 18 or older at time of entry. Starts on or about 11:00 pm PT on January 12, 2012 and ends at 11:59 pm PT on January 31, 2012. Enter once each day (each an “Individual Entry”). You will also receive two Entries (each “Referral Entries”) for every entrant you refer (a “Referral Entrant”); provided, that the Referral Entrant entered the Promotion through the referral link that you received upon your first Individual Entry into the Promotion. Limit one Individual Entry per person per day. Limit twenty-five total Entries (Individual Entries and Referral Entries combined) per person. Prize (1): $1,000 (awarded in the form of a check). The odds of winning depend on the number of eligible Entries received. To enter, go to www.prosper.com/payoffdebt. Subject to these complete official rules.

This article (Prosper Holding “Pay Off My Debt” Sweepstakes) 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.

The company issued the following press release:

BOSTON, MA, Jan 09, 2012 (MARKETWIRE via COMTEX) — National Family Mortgage, America’s premier peer-to-peer lending solution for home loans between relatives, today announced that company founder and CEO Timothy Burke will join a panel on the future of home financing at the upcoming Real Estate Connect 2012 Conference in New York City, New York, on Friday, January 13, 2012.

Who:

Timothy Burke, CEO of National Family Mortgage Burke has long been regarded as a consumer advocate, a peer-to-peer lending pioneer, and a disruptor of established financial service models. As the sales director of the first online peer-to-peer lending company CIRCLE LENDING (later, VIRGIN MONEY US), he was responsible for leading a team that defined the industry with over $450m in loan volume between family members and friends. This commitment to beating a broken institutional banking system and empowering consumers to efficiently build, protect, and transfer family wealth led to his founding of P2P lending website, National Family Mortgage. NFM brings a safe, easy and affordable way for families to realize the dream of homeownership, save money, reduce legal and gift tax issues, protect relationships and keep money in the family.

What: Panel discussion, “Rethinking Lending: The Future of Financing” Innovative home financing solutions are crucial to our economic recovery. While home prices and interest rates are low, banks are not lending; today’s lenders require perfect credit, strong employment history and 20% down payments. According to the National Association of Realtors (NAR), 1/3 or recent first-time homebuyers received down payment help, usually from their parents. Meanwhile, the IRS has begun a nationwide crack-down on the widespread failure by Boomers to file required gift tax returns on intrafamily transactions. How can we ensure that today’s first-time buyers are not paying the price for yesterday’s failures by a broken banking system? Can peer-to-peer lending revive the real estate industry?

When: Friday, January 13, 2012, 9:15 a.m. EST – 9:40 a.m. EST Real Estate Connect Conference

Marriott Marquis Times Square

Produced by Inman News, Real Estate Connect is the preeminent, must attend conference that brings together the biggest names in real estate and technology to discover emerging trends and to develop innovative industry solutions for professionals and consumers.

Media attending the conference who are interested in arranging an interview with Burke should contact Jeanne Kleinberg at 781.269.5478 or at marketing@nationalfamilymortgage.com.

To learn more about National Family Mortgage’s Win-Win Mortgage please visit http://www.nationalfamilymortgage.com

About National Family Mortgage National Family Mortgage helps people structure, document, register, and manage the repayment of secure, tax-deductible mortgage loans with their relatives; in a way that is both financially and personally rewarding. Most National Family Mortgage customers are seeking to create win-win mortgage solutions and keep money in the family; borrowers access home loans with lower interest rates and origination fees than offered by most banks while lenders earn better returns than from CDs, money markets, or savings accounts. National Family Mortgages sets-up the serving of the loan to help protect relationships and make year-end tax reporting easy.

This article (National Family Mortgage CEO to Speak at Conference) 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.

How is Peer to Peer Lending Interest Taxed?

Income from peer-to-peer lending is taxed like other interest income—as ordinary income. This means, that if you are in the 25% tax bracket, you will have to pay 25% of the interest that you earned from Lending Club or Prosper to the federal government. Unfortunately, peer-to-peer lending investments do not receive the same favorable tax treatment that mutual funds and stocks do.

What forms should I expect to receive from Lending Club?

Lending Club will issue a 1099-OID form to investors for all Lending Club notes issued after October 24^th, 2008. The calculation that Lending Club uses for the form is the interest payments and late fees that you have received as a borrower, minus the service fees that you pay as an investor. You will only get this form if you paid $10.00 or more in interest each year.

According to the book Wall Street Words, The 1099-OID form is used to report “the amount of implied and real income derived from original-issue discount securities such as Treasury bills, zero-coupon bonds, and commercial paper.” Income from a 1099-OID form must be included on Part 1 of Schedule D of your federal income tax return.

There are a few other 1099 forms that Lending Club will send out as well. You may receive a 1099-B form if you had sold notes on the FOLIOfn platform during the previous year. If you participated in any of Lending Club’s bonus offers, you will receive a 1099-MISC form if you received more than $600 in incentives. If you have any loans issued before October 14^th, 2008, you will get a 1099-INT form from Lending Club, however, there are very few of those loans that remain outstanding.

Lending Club makes tax documents available by January 31^st of each year. You can access your tax statements by going into your “Account Statements” section.

Lending Club also has a set of Frequently Asked Questions regarding tax matters.

What forms should I expect to receive from Prosper?

Investing in loans with Prosper.com has very similar tax implications to that of investing in loans with Lending Club. Prosper will send out a 1099-OID form to investors that have invested in peer-to-peer loans on Prosper in 2009 or later. You will only get a 1099-OID from Prosper if you earn more than $10.00 in interest each year.

Prosper also sends out a few other 1099 forms. If you have notes dating back to before 2009, you will a 1099-INT form on your earnings. If you receive $600 or more a year in late fees and incentive payments from Prosper, you will get a 1099-MISC. There are some states that have reporting exemptions which would trigger a 1099 to be sent at a lesser amount. If you sell Prosper notes by way of FOLIOfn, you will receive a 1099-B form.

Prosper also has a “taxes” section under their Investing FAQ.

Defaults and Charge-Offs

As an investor, peer-to-peer loans that go into default can be considered investment losses. Lending Club simply reports written-off notes via year-end statements. Prosper sells some of its “bad debt” which can make tax matters a bit more complicated.

Prosper’s FAQ says the following about their treatment of charge-offs:

“Charge-offs and gross proceeds from any bad debt sale to a third party will be reported to investors in a year-end investor statement, and debt sales will be filed on tax form 1099-B. Using the loan principal balance before sale and the sale amount, investors can calculate their net amount of loss for the year. Investors are encouraged to consult their tax advisor to determine their tax basis on loans sold to debt buyers.Delinquent (late) loans which have not yet been sold to a debt buyer will have no impact upon taxes until further action on these loans takes place.”

Lending Club’s FAQ says the following about their treatment of charge-offs:

Lending Club notes that are written-off are reported on your year-end investor statement.

Disclaimer: I am not an accountant and do not offer professional tax advice. You should seek the counsel of an experienced accountant to answer specific tax questions.

This article (Peer-to-Peer Lending Federal Tax Guide) 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.

• Taking Estimated ROI to the Next Level – I had my first defaults start to come in the last 30 days.  What’s interesting about this is how the platforms calculate the ROI…  to describe it in one word:  ”jumpy”.  Meaning, you can have a ROI that varies by more than 1% once a default happens.  If your ROI was to be plotted with…
• Roundup of Social Lending News – January 7, 2012 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. I have been offline most of this week as I traveled to Sydney, Australia (my home town) and…
• Let’s Get Real About Your New Year’s Resolution – Well, it’s that time of year again! The gym has gotten crowded and our bathrooms and kitchens are sparkling. But whether our resolutions are about health or wealth, many people will find themselves slipping off track over the next few weeks.
  So are you ready to make 2012 the year that you put your finances in…
• Introducing Prosper Mobile – We’re proud to introduce Prosper.com designed specifically for mobile phones, available now for our valued investors. With Prosper Mobile for iPhones and Android devices, you can manage your account, invest in listings and transfer funds while you’re on-the-go. Here’s how it works….
• Nickel Steamroller Webinar – I’ll be hosting a 45 minute webinar followed by a 30+ minute Q/A discussing the features and tools of Nickel Streamroller. I want to dive into the platform in-depth. We will cover everything from how to find statistically meaningful filters to some of the low level technical details. I’ll talk a little about some of…
• Review of My P2P Lending Predictions For 2011 – In January 2011 I wrote down my predictions for p2p lending trends in 2011. Now let’s see how far I was off. The black text is my original prediction, with the review added in green and yellow.
  Advent of whitelabel providers (probability 100%)
  Okay let’s start this with a safe bet. In 2011…
• See Where All of Your Notes Are on a US Map – Recently added to the portfolio analyzer is the ability to see the location of your notes on a a US map. The city will only be plotted once if you have multiple notes from the same city….
• My Five P2P Lending Predictions for 2012 – Happy New Year! I hope you enjoyed the arrival of the new year last night whatever you did. As for me, I am getting ready to go on a big trip, so it has been a busy holiday weekend for me. Tomorrow, my family is flying to Sydney (my home town) for an extended visit….
• A Look Back at the Social Lending News in 2011 – Normally, every Saturday I bring you the latest news from around the web about p2p lending. Today, I will do that as normal, but I am also going to feature some of the major news stories of 2011. Nickel Steamroller – 2012 Predictions for P2P Lending Pinch That Penny - Investing: P2P Lending vs. Bank CDs…
• 2011 Was a Phenomenal Year for P2P Lending – Well 2011 certainly went out with a bang at Lending Club and Prosper. Both companies posted another month of solid loan volume increases and their combined total crossed $40 million for the first time. This compares very favorably to the $16.6 million combined volume for December 2010. The total dollar amount for all new loans…
• New Features Including Export Added to Stats Page – The stats page has gotten a minor upgrade as a result of some new data I wanted to get from the platform. You can check it out here     I’ve also included a screen shot explaining the changes….
• 2012 Predictions For P2P Lending – 1. Secondary Market Liquidity Issues More states will have access to the primary markets that previously did not.  As a result investors that have been forced to use the  secondary market will flock to the primary market for obvious reasons.  The number of buyers on the secondary market will sink and selling notes will become…

This article (This Week in Peer to Peer Lending: 1/8/2012) 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.

Prosper wrote the following on its blog yesterday, “We’re proud to introduce Prosper.com designed specifically for mobile phones, available now for our valued investors. With Prosper Mobile for iPhones and Android devices, you can manage your account, invest in listings and transfer funds while you’re on-the-go.”

To access Prosper’s mobile website, simply navigate to Prosper.com on your mobile phone. Alternatively, you can navigate to M.Prosper.Com on your computer to view the mobile interface.

This article (Prosper Launches Updated Mobile Site) 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.

The company released the following press release yesterday afternoon

Los Angeles, CA, January 03, 2012 –(PR.com)– WikiLoan has announced that they have a new opportunity on their peer to peer lending site. The service is now accepting individuals to sign up as lenders for their list of borrowers that require a loan.

WikiLoan provides its lenders with the option to view different borrower’s portfolios. The lender can select which borrowers they would like to contribute to. Many participants choose to support someone with goals that are similar to their own, or people with potential that are only missing a helping hand, to succeed at their dreams.

This article (WikiLoan Now Recruiting Lenders) 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.

December was another solid month for my portfolio of Lending Club loans. My Lending Club account balance has now risen to $95,779.23 and I’m currently earning a net annualized return of 13.21%.

I did not place any new money into my Lending Club account during the month of December because I made a $10,750 investment in Prosper. I’ve outlined the strategy that I’m using in Prosper the post titled “My Prosper Investment Strategy.” I will write a performance update on my Prosper investments next month when I start to receive interest payments from the notes that I’m investing in. I’m finding there aren’t a large number of loans that meet the criteria that I’m using, so it may take some time to fully invest my initial $10,750 into Prosper notes.

All of my Lending Club funds continue to be fully invested in notes using the strategies that I’ve outlined in the post, the Great Lending Club Experiment. My net annualized return rose from 13.11% in November to 13.21% in December. This growth isn’t statistically significant; it just means that I haven’t had much of any new notes be charged-off during the month. I anticipate that my NAR will settle down to somewhere between 8% and 10% after the portfolio ages out over the course of the next couple of years. There are now 1,921 notes in my portfolio, up from 1,838 last month, with an average note size of $53.00.

Nickel Steamroller’s Portfolio Analysis tool is also providing me a good idea with how my various portfolios are performing. You can read about the strategies that I’ My “Common Sense” strategy is underperforming the other strategies that I’ve listed, but this is primarily because the average age of notes in the portfolio is much older. Currently, my LendStats D-F strategy is yielding the highest ROI at 13.26% and my LendStats B-C strategy is yielding a rate of return of 10.25%. My “LendStats A” strategy, a small portfolio that I’m using to determine if I can create a portfolio that has no late payments or defaults, is currently yielding an ROI of 7.41%, and has had no late payments to date.

My “Crowdsourced” strategy is not performing as well as I’d like. It has had a number of early late payments and is currently sporting a ROI of 9.01%. The idea for this portfolio was to invest in “popular loans” that get funded quickly. This experiment is beginning to demonstrate that just because a loan has a lot of interest from investors, doesn’t mean it will perform well. You are much better off creating your own set of criteria for loans based off of historical data from LendStats.

I continue to be happy with my Lending Club investment. During the month of December, I earned $992.89 in interest from the notes that I own. By the end of 2012, my goal is to have peer-to-peer lending investments which will generate a total of $2,000 in interest payments each month.

This article (My Lending Club Performance – December 2011 Update) 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.

• Prosper and Lending Club Facilitated $40 Million in Loans in December - Prosper and Lending Club facilitated a total of $40.5 million in loans between borrowers and investors during the month of December, marking the strongest month in U.S. peer-to-peer lending history. Lending Club lead the way, issuing $31,007,025 across 2,267 loans. This is the first month where Lending Club issued more than $1 million in loans…
• Lending Club Waives Fees on Large Loans - Lending Club announced that it would be waiving its 1% service fee on notes associated with loans of $20,000 or more for a limited time. Lending Club explained the move on its website, “Larger loans need to attract investments more quickly than small loans in order to fund in the time available. So for a…
• Prosper Launches ‘Fired Up’ Kindle Fire(R) Sweepstakes - Prosper is holding yet-another promotion. This time, individuals that register on Prosper’s website will be entered to win a new Amazon Kindle Fire. This effort, along with Prosper’s previous sweepstakes, is a move by Prosper to add new subscribers to their their email marketing distribution list. Here’s the text of the press release: SAN FRANCISCO,…
• A New Year’s Resolution for my Peer-to-Peer Lending Investments - 2011 marked the first year that I seriously put any amount of money into my peer-to-peer lending investments. I now have about $105,000 invested between my Lending Club and Prosper accounts. The bulk of that is currently in my Lending Club account, but I anticipating growing my Prosper account throughout the course of 2012. Ultimately,…
• This Week in Peer to Peer Lending: 12/26/2011 - Here are some of the latest peer-to-peer lending and financial innovation stories from around the web: Roundup of Social Lending News – December 24, 2011 – Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around…
• Zopa Italy Rebrands as Smartika - Zopa and Zopa Italy have ended the franchise agreement which allowed Zopa Italy to use the Zopa branding. As a result, Zopa’s Italy operations will be rebranding under the name Smartika.IT. Smartika CEO Maurizio Sella recently made the following announcement about the name change (this is a rough translation from the original Italian): The franchise…

Here are some recent news items from other social lending sites:

• Roundup of Social Lending News – December 24, 2011 - Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week. I expected the week before Christmas to be a pretty quiet one on the news front but that…
• Peer to Peer Lending Feature on Fox News - Earlier this week there was a short story on p2p lending on Fox News. It was focused on how small businesses are using Prosper and Lending Club to obtain loans and there was also some general discussion about the industry. An article like this normally would just get mentioned in my Saturday news roundup but…

This article (This Week in Peer to Peer Lending: 1/1/2012) 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.

Prosper and Lending Club facilitated a total of $40.5 million in loans between borrowers and investors during the month of December, marking the strongest month in U.S. peer-to-peer lending history.

Lending Club lead the way, issuing $31,007,025 across 2,267 loans. This is the first month where Lending Club issued more than $1 million in loans per day.  Lending Club’s loan volume growth was up a whopping 12.68% over its November total of $27,518,650. The significant month over month growth can be primarily attributed to Lending Club issuing a larger average loan size. During the month of November, Lending Club’s average loan size was $13,329. In December, the average loan size increased to $13,677. There was a 1.5% increase in the total number of loans that Lending Club made between November and December.

Lending Club’s future growth is currently limited by the loan capital that investors make available. A Lending Club executive recently told me that the company ratchets its marketing efforts up as investor demand increases. It’s possible that Lending Club will continue to see significant growth in 2012 as long as the company can keep attracting investors.

Prosper also had a strong month in December, facilitating a total of $9,500,643 across 1,380 in loans. Prosper is now at the point of surpassing the monthly loan volumes that it had seen during its first peak in 2007 and 2008. Prosper saw a 5.5% increase compared to its November loan volume total of $9,003,672. Prosper’s largest investor, worth-blanket2, has now invested more than $10.25 million in notes on Prosper.

Prosper and Lending Club has now issued a total of $740 million in loan volume across 89,018 notes. At current rates of growth, the companies will have issued a combined total of 100,000 loans in early to mid-April. The two companies will also likely hit a total of $1 billion in loans in May or June of this year at current loan volume rates.

2012 Predictions

It’s looking like 2012 will be a massive year for peer-to-peer lending. In December 2012, I anticipate that Prosper will see around $20 million in monthly loan volume and Lending Club will see about $55 million in monthly loan volume. I also predict that Prosper and Lending Club will facilitate a total loan volume in 2012 that’s comparable to what the two companies have facilitated up until this point. It would not surprise me to see the two companies issue $600 million to $800 million in loans to borrowers in 2012.

I predict that 2012 will mark the entry of a third significant competitor into the peer-to-peer lending business in the United States. I don’t anticipate that that the business model used by a new competitor will be identical to that of what Prosper and Lending Club are using. I would guess the most likely scenario is that an established financial institution will try to get into the business of peer-to-peer lending.

This article (Prosper and Lending Club Facilitated $40 Million in Loans in December) 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.

Lending Club explained the move on its website, “Larger loans need to attract investments more quickly than small loans in order to fund in the time available. So for a limited time, Lending Club is waiving the 1% service fee2 on all new investments made in loans of $20,000 or more – for the entire lifetime of that loan. Terms and conditions apply.”

The company also noted that larger loans tend to perform slightly better than smaller loans on its platform. Lending Club stated that notes above $20,000 have returned a net annualized return of 10.5%, whereas loans between $15,000 and $20,000 have yielded a NAR of 9.97%. Loans between $10,000 and $15,000 have yielded a NAR of 8.92%. Loans between $5,000 and $10,000 have yielded a NAR of 8.13% and loans smaller than $5,000 have yielded a NAR of 7.44%.

By waiving the service fee that investors pay to Lending Club, investors will see an improved net annualized return of 0.42% and 0.75% depending on the loan’s term and the interest rate of the loan. Lending Club noted, “an investor with a projected return of 8.52% with the service fee would have a projected return of 8.96% without the service fee – an overall increase in the projected return on this loan of almost 5%.”

Lending Club is likely dropping its service fee on a test basis to increase investor demand in larger notes. Because borrowers with larger loan sizes have much larger payments, investors tend to see them as riskier investment options.

Here’s the fine-print associated with the offer:

Lending Club will waive the 1% service fee for the lifetime of the loan on investments made no earlier than December 29, 2011 and made in loans greater than or equal to $20,000. Lending Club reserves the right to change or discontinue this offer at anytime, any change or discontinuation would only affect loans issued after the effective date of the change or discontinuation. This offer only applies to investments made in loans that meet the criteria of the offer at the time of issuance. The offer only applies to standard borrower payments during the original term of the loan, either 36 months or 60 months depending on the term of the loan. The offer only applies to regular payments made on the loan and does not apply to recovery and collection fees or the like. Lending Club will credit your account for any fees incurred within 60 days of payment, if any.

This article (Lending Club Waives Fees on Large Loans) 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.