zcommodore

This quiet period that Prosper announced is a two-edged sword.  Apparently it is necessary as has been seen in the LendingClub situation.

If the quiet period doesn't last too long, it could be a huge boost for Prosper.  Once a secondary market is included, it will add a huge revenue stream for Prosper since they will be able to get fees for each loan transaction, not just loan originations.

In the interim, they have a problem where current lenders will see the effects of their previous bidding decisions.  For lenders who were taking a lot of bad risks, they will probably see the error of their ways and likely never return except to sell their loans.  Unfortunately, a lot of lenders could be in this category so Prosper will have to start over attracting new blood.  Having a more liquid platform for lenders should help with that.

Also, I don't know what "alternative means" Prosper has to fund borrowers but LendingClub didn't do a whole lot of funding while they were "quiet".  I don't anticipate Prosper doing a whole lot either so the total numbers of loans originated aren't going to look too great for awhile.  However, once Prosper's "quiet period" is over, I doubt they will have much trouble attracting borrowers since there is always a market for people who want/need money.

One of my main concerns is whether or not Prosper will be like LendingClub and only allow lenders from certain states.  If Prosper only allows lenders with certain minimum resources like LendingClub is doing, it will adversely affect their popularity.  Admittedly, there's the 80-20 aspect where the 80% of lenders who can't participate due to a lack of resources only affected 20% of their bottom line so ultimately, it probably won't really be a problem.  However, if there is a list of states and it is the same as the one for LendingClub that can/can't lend, that will be a bigger factor to how many people will be able to participate and will hurt their bottom line and their ability to recover from the "quiet period".

Ultimately, I think Prosper will come back and a secondary market will be good for them.  The question will be in the end, whether or not Prosper can become profitable after they restart their operations.  Based on their last 2+ years of operation, I'm not convinced they will be but I'm open to the possibility that they might.

For the last few months I've been slowly drawing down my exposure to Prosper and putting the money into LendingClub.  Now that LendingClub is closing to lenders (temporarily?) I'm debating what to do.  Should I keep drawing down my Prosper money and just put it in a savings account in case LendingClub reopens?  Should I go back to bidding on Prosper as funds become available?  Or should I just abandon P2P lending all together?  There's always the possibility another P2P lending site might show up (LoanIO, where are you?)

The money I have invested isn't much right now and I have no interest in adding to it for a number of reasons.  Since I do have some invested, I'm still interested in the concept and would like to see how it all works out first hand.

FWIW, I only have 5 $25 loans on LendingClub right now.  3 of them have made their first 2 payments on time, the other 2 are too new and won't have a payment due until sometime in May.  Some of that money is from referrals, not just money I've transferred from Prosper.

Maybe I should start a poll on Prospers.org....  Naaah. :-)