Peer-to-peer lending, which now goes by the term marketplace lending, took a big step forward last year. What is marketplace lending? Simply put, it’s an Internet-based lending market created by connecting borrowers with lendors or investors. There are various companies with different approaches to the concept. Advantages of this type of online lending platform may include lower interest rates, quick turnaround on the credit-approval process, and serving a niche historically underserved by the banking industry. 
Lending Club has been the leader in this field and its December 2014 IPO highlighted the importance of this new lending alternative. An important next step is for the SEC to finalize its crowdfunding rules. Crowdfunding could allow marketplace lending without the need to register securities (as Lending Club ultimately did) to comply with securities laws. The ability to crowdfund could also get marketplace lenders back to something closer to their peer-to-peer roots. This could also reduce costs to lenders and borrowers both. Find out more in my blog post: Marketplace lending: A hot new industry looking for crowdfunding (The Securities Edge, 2/12/15) Image courtesy of Stuart Miles/FreeDigitalPhotos.net
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