Prosper Marketplace

Prosper Marketplace, Inc. is a San Francisco, California-based company that operates Prosper.com, an online auction website where individuals can buy loans and request to borrow money. Borrowers set the maximum interest rate they wish to pay, and loan buyers, called "lenders," bid on specific loans by committing a portion of the principal and setting the minimum interest rate they wish to receive on a particular loan. Prosper manages the reverse dutch auction, assembling bids with the lowest interest rates in order to fund the loan.

Prosper verifies selected borrowers' identity and personal data before funding loans and manages loan repayment. These unsecured loans are fully amortized over three years, with no pre-payment penalty. Prosper generates revenue by collecting a one-time fee on funded loans from borrowers, and assessing an annual loan servicing fee to loan buyers. The idea for the service is derived from group banking concepts, such as rotating savings and credit associations. Other motivating ideas derive from the concept of microlending.

Prosper publishes performance statistics on the website; these are available to the public at large. All transactions are in US dollars; lenders and borrowers must be US residents.

Prosper opened to the public on February 5, 2006. Prosper was founded by Chris Larsen, who also founded E-loan, and John Witchel and is backed by Accel Partners, Benchmark Capital, Fidelity Ventures, Omidyar Network, DAG Ventures and Meritech Capital Partners.

In April 2008, Prosper aligned with the Utah-charted Web Bank. Previously, Prosper operated under individual lending licenses issued by various states, and was subject to each state's maximum interest rate laws. By afiliating with Web Bank, Prosper borrowers nationwide (except in Texas and South Dakota) can offer a maximum interest rate of 36%, which lenders can then bid down.

On December 1, 2008, Prosper Marketplace Inc. entered into a settlement with state securities regulators over sales of unregistered securities.

for more visit---http://www.prosper.com/