Old Line Banker Puts $1 Million Into P2P Lender Prosper

Prosper pioneered the idea of concept of people-to-people lending in the U.S with its launch in 2006. Unfortunately, the startup hit a rough patch last year when the SEC stopped all lending on the platform because the company didn’t register as a seller of securities. With the new climate of heightened regulatory oversight in light of the financial meltdown, the SEC is being more judicious about overseeing financial institutions.

The startup was able to re-launch its site over the summer after the SEC gave Prosper the OK to facilitate peer-to-peer lending. Prosper became the first and thus only Internet auction-based P2P loans platform to have its registration statement declared effective by the SEC. Prosper is currently available to lenders in California, Colorado, Delaware, Georgia, Illinois, Minnesota, Montana, Nevada, New York, South Carolina, South Dakota, Utah, Wisconsin, and Wyoming. Borrowing is permitted in the District of Columbia and all states except Iowa, Kansas, Maine, and North Dakota.

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