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November Produces More Growth for U.S. P2P Lenders

by Peter Renton on November 30, 2011

Last month I wondered whether the holiday-shortened month would impact the record run that Lending Club and Prosper have been on. But as the month closed this evening the staggering growth for these U.S. p2p lenders continues unabated.

Lending Club Issues $28.3 Million in New Loans

Lending Club set another record with $28.3 million in new loans for the month. This was up from $27.5 million last month and $11.6 million in November last year. They issued 2,232 new loans which was also a record. With the Thanksgiving holiday break this was a very impressive performance from the world’s largest p2p lender. No wonder Forbes magazine named them one of America’s most promising companies in an article on their site today.

Lending Club is closing in on $500 million in loans issued since inception and are probably on track to reach their target of $1 billion in total loans by the end of next year. Their 18-month chart below demonstrates the amazing run they have been having. The black line is the three month moving average.

Lending Club 18-month chart showing growth in p2p loans

Prosper Shows Loan Growth for the 14th Month in a Row

Prosper broke $9 million for the first time in their post quiet period (Prosper 2.0) operations. This was helped along by a huge influx of new cash from Worth-blanket2, their largest institutional investor. They chipped in around $2.4 million in new money for the month which brings their total investment since coming on board in May to $10.8 million.

But they were not alone. If you look at the top 20 investors by dollars lent on Lendstats for Prosper 2.0 you will see six new lenders in that list. Each one of these big new investors have come on board in just the last three months. Managedfund is the largest of these new investors and they kicked in around half a million dollars in new money this month.

Prosper continues to get a great deal of support from institutional lenders, but they are not ignoring individual investors. This was evidenced by the great bonuses for new investors announced earlier this month. Prosper doesn’t share the breakdown in numbers between the two types of investors but any way you slice it their growth in the past year has been impressive.

Prosper 18-month chart of p2p loan growth

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{ 10 comments… read them below or add one }

Mike November 30, 2011 at 7:04 pm

Has anybody else noticed that there are now typically over 900 loans on the Lending Club platform on a typical day?

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Mike November 30, 2011 at 7:07 pm

Has anybody else noticed that there are now typically over 900 loans on the Lending Club platform on a typical day? I hope they have sufficient staffing to adequately process all that should go along with a loan application. I recently had a loan in the A1 category miss their first payment, and then immediately go on a payment plan. This doesn’t instill great confidence in LC’s ability to correctly assign risk. Anybody else have any negative surprises on their loans recently?

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Dan B December 1, 2011 at 5:26 am

Mike………… Factually speaking a “typical day”, as you call it, would see more like 600-650 notes available. Lending Club has only had a few 900 note days in its history.

I have seen no recent increase in risk with my accounts.

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Peter Renton December 1, 2011 at 7:14 am

@Mike, There was definitely a spike in loans a bit over a week ago. They went from 400-500 loans on the platform to 800-900 loans almost overnight. There was some discussion about it on LC’s Facebook page but I still haven’t heard any official response as to why it jumped so suddenly.

And like Dan, I have seen no recent increase in the risks you described with my accounts.

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Louis Lamoureux December 1, 2011 at 4:20 pm

There’s an easy explanation for the spike in loans and I think the great economist Billy Ray Valentine can explain it best:

“Okay, pork belly prices have been dropping all morning, which means that everybody is waiting for it to hit rock bottom, so they can buy low. Which means that the people who own the pork belly contracts are saying, “Hey, we’re losing all our damn money, and Christmas is around the corner, and I ain’t gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain’t gonna f… my wife ain’t gonna make love to me if I got no money!” So they’re panicking right now, they’re screaming “SELL! SELL!” to get out before the price keeps dropping. They’re panicking out there right now, I can feel it.”

Lou :)

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Dan B December 1, 2011 at 4:46 pm

I can’t believe that I was in college when that movie came out. Where does the time go?

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Peter Renton December 1, 2011 at 5:07 pm

@Lou, Thanks for sharing. One of my favorite movies of all time. Lookin’ good Louis.

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Mike December 2, 2011 at 8:49 am

The rep I spoke with yesterday said the spike was due to a recent direct mail campaign, and new radio ads. He didn’t mention pork bellies…

Peter, I may have missed this, but did you report back after visiting LC offices? Just curious what your impressions were. Thanks in advance.

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Ryan December 2, 2011 at 11:10 am

If I remember hearing correctly, Prosper needed to do about $20M a month to be profitable. Is there a similar number out there for Lending Club? Do we know if LC is already profitable?

Sorry if you’ve covered this in a previous post.

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Peter Renton December 3, 2011 at 7:31 am

@Mike, I had a great visit with Lending Club. Things are really cooking over there that is for sure. Everyone there is very excited about where they are and the growth they have been experiencing. I also visited Prosper (they are literally 300 yards away from each other) and felt the same vibe there. These are exciting times for both companies.

@Ryan, The numbers I have heard is $25-$30 million a month break even for both Lending Club and Prosper. Lending Club is not profitable yet but I will be very curious to read their financials from this current quarter when it is released early next year. This is the first quarter ever where every month will be over $25 million, so I would expect to see bottom line numbers close to break even this quarter.

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