Greedy Bankers Want This Banned! How to Start Earning Interest from Borrowers as Early as Monday Morning

8:12 AM

Dear Entrepreneur:

This business is unlike anything I’ve seen before.  I’ve wrote about it last year, but so much has changed I wanted to give you an exclusive update.

Payday

This opportunity has been featured in The Wall Street Journal, USA Today, Forbes, Time, Wired, Fast Company, CBS News, CNBC, Business Week, and Money Magazine and hundreds of other places.

The opportunity is getting a spotlight because entrepreneurs are making money on lending just like greedy bankers.

My Exposure to P2P Lending

P2P lending is an acronym for person-to-person lending.  I had an interesting exposure to it.

Twenty six years ago I hired a kid from Southeast Asia.  His name was Pao.  One afternoon Pao described an approach to startup businesses (and financial lending) in Southeast Asia that blew me away.

Pao explained the reason why most Asian businesses tend to grow faster than other businesses. He described how Asian entrepreneurs coming to North America often leverage an ancient financing “formula”.

Ancient Lending Formula

Pao talked about when an entrepreneur has an idea for a business; he or she would present the idea to a small group of elders or “advisors.”  If the group approved the business idea, the entrepreneur would receive all of the necessary start-up capital to start the business.  This type of financing enables young entrepreneurs to own his or her business lock, stock, and barrel, unlike a typical venture capital deal or lender (who always seem to gain ownership of your company when it’s profitable).

Pao told me there was only one requirement for securing startup cash.  When the business becomes profitable, the entrepreneur would be required to contribute funds to the group so they could help the next entrepreneur succeed!

It’s brilliant!

When the strategy is working the elders can fund dozens of ventures at the same time.  I’m sure you’ve noticed how immigrant businesses often spread like wildfire in the United States, Canada, and other parts of the world. Part of the success is due to this Asian financing formula.

The opportunity I discovered is similar to the ancient business formula, with some high tech added to the mix.  It’s an opportunity to fund other entrepreneurs directly, and receive compensation (in the form of interest) for doing it.

It’s like having your own web-based bank!

The opportunity is called Prosper.com.

Prosper.com is a people-to-people (P2P) lending marketplace.

It goes like this…

Prosper.com leverages some of the basic principles of the Asian business formula, namely lending money to eager entrepreneurs, and receiving interest just like a bank.  The objective of Prosper.com is to make consumer and business lending more rewarding for everyone.

Prosper.com works like an online auction.   But instead of listing and bidding on items, people list and bid on loans.  Entrepreneurs who want to lend money to other people set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000.

If you think that’s great… you’ll love this…

People who want to lend money can easily diversify their holdings by using “standing orders,” which automatically makes dozens of small loans to different borrowers.

If you understand anything about banking you’ll know the secret to making money is by “spreading the risk”. Banks do this by lending money in the form of hundreds, thousands, and even millions of small loans.

Bankers understand the philosophy of “spreading the risk” and diversifying by lending to as many people as possible. This limits their losses when a miniscule number of customers default.

This past weekend I attended a dinner party at a swanky resort on the coast of Maine. One of the guests was a high powered “risk assessment” director. His job was to “spread the risk” of his bank’s assets and limit downside “exposure”.

We had a great conversation and he smiled when I told him about Prosper.com, but he quickly added, “I hope our customers don’t find out about it”.

Can you see the advantage of a Prosper.com diversification strategy?

Borrowers can post loan needs for up to $25,000 and set the maximum rate they are willing to pay a lender.  The auction process begins as people who want to lend bid down the interest rate.  When the auction ends, Prosper.com takes the bids with the lowest rates and combines them into one simple loan.

In addition, Prosper.com handles all of the administration tasks including loan repayment and collections on behalf of the matched borrower and lenders.

I committed funds to Prosper.com within 24 hours of discovering it. This site has fulfilled one of my goals of owning a bank.  In addition to making money as a lender, you can make money by referring borrowers and lenders too.

How the Prosper.com Referral Program Works:

1. You can add a special link to Prosper on your website, blog, e-mail newsletter, discussion forum, MySpace page, Facebook page, YouTube video, and so forth

2. An individual clicks on your Prosper link

3. A person must join Prosper within 30 days of clicking on your link

4. Within 90 days of joining Prosper, when your referral gets a funded loan (as a borrower) or funds a loan (as a lender), you get cash in your Prosper.com account (this happens as soon as your referral’s first monthly payment clears [as a borrower] or first loan originates [as a lender])

Referral Fees

When you refer a lender to Prosper.com you receive $25. Your referral receives $25 as soon as they fund his or her first loan. When you refer a borrower, you receive 0.5 percent of your friend’s loan amount as soon as your friend’s first monthly payment clears.

It’s truly amazing.

Many companies have tried to make this business work. But it looks like Prosper.com has the trading platform down, and it’s incredibly easy to use (as a borrower or lender).

Now you have an opportunity to become a financial lender in 15 minutes or less. That’s how long the signup usually takes – although confirming your bank account will take a little time, too.

Regards,

Marc Charles

(Ed Note:  Marc Charles is referred to as “The King of Business Opportunities” ….and for good reason. He should be known as “The King of Legitimate Business Opportunities”…because he’s launched, bought, sold reviewed and advised on hundreds of businesses and money making opportunities. He understands legitimate opportunities. Marc has agreed supply League of Power members with crucial updates regarding legitimate business and money making opportunities.)

*** Action Strategy ***

Open an account at Prosper.com.

You can start earning interest from borrowers by Monday morning.

You can open an account as either a lender or borrower.

My focus this week is on the lending opportunity.

After your identity and bank account are verified, you can start lending to borrowers.  It took me about 24 hours to set up an account.

Interestingly, you can place a “cap” on the lowest interest rate you’re willing to accept.  What’s more, you can choose to only accept borrowers with the highest credit ratings!

I like the “diversification” strategy.  Diversification enables you “spread the risk” with different kinds of borrowers and deals.

The best part (besides money making) is you’ll be helping honest, hardworking people… and having fun in the process!

***Valuable Resources***

P2P Lending News

Loanio

Zopa

MicroPlace (an eBay company)

LendingClub (another P2P lending site)

AmericaOne

SocialLending Network

     
     
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