How To Fund A Dog Wash!
The Times today has an article about peer-to-peer lending by Alexandra Frean.
In it she describes how a guy called John Good from Davison, Michigan got the money to expand his car wash into the clean dog business by using a loan from Lending Club.
It’s all good stuff and just shows how the banks are missing the peer-to-peer lending market, which I think will be one of successes of the next ten years or so and probably much longer.
In the United States the systems are different to the UK, but it doesn’t totally stop them having successes. I myself use the peer-to-peer lending site, Zopa, as my deposit account as even if I run it conservatively, it gives me upwards of six percent before tax. There is risk and I have had 3 contracts out of 2359 go bad, which have cost me £322.60 or 0.6 percent of my total investment. Alexandra’s article quotes returns of 9 percent net of defaults and charges in the United States.
I could probably make a higher return, if I upped my rates, but then I’d get a higher rate of default, as I’d probably attract more risky borrowers.
I also think I’m benefiting because I’ve been lending money for some years now and have a strong feeling about how you arrange the rates to get the best value.
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The Anonymous Widower 
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