What is marketplace lending?
It's an exciting new way for people to borrow money from other people. The people providing the funding are investors who would like to loan money to creditworthy borrowers.
Borrowers get the recognition for their good credit behaviour by saving with better rates. For investors, it offers an opportunity to invest in a new, attractive fixed income asset class.
How are you different from 'payday' lenders?
'Payday' lenders are generally lenders of last resort. In return for access to short-term credit (about 30 days) and loans that are typically of small nominal value, payday borrowers pay extremely high fees and interest rates.
SocietyOne is not a payday lender. We look for creditworthy, quality borrowers who typically have established relationships with major banks. Our loans range up to 60 months, from $5,000 to $35,000, which does not fit with the definition of a payday loan. We think quality borrowers with good track records are not getting the best rate they deserve.
How is marketplace lending different from a bank loan?
SocietyOne is not a bank and will not become one. Marketplace lending provides a different and interesting alternative for creditworthy borrowers and fixed income investors to get a better deal. Part of the attraction is that it can provide better rates and returns without the infrastructure cost and complexity that comes from being a traditional bank or deposit-taking institution.