Since its start-up in February, 2006, San Francisco-based Prosper Marketplace Inc. has brokered more than 1,800 loans between individuals, totaling about $7.7 million, the “Wall Street Journal” reported in its 7/24/2006 issue. The company says the proportion of lenders to borrowers has exceed their initial expectations. Lenders are being attracted by interest rates as high as 29%, while for some borrowers with bad credit, Prosper Marketplace helps them get a loan that was not available through more convention channels.

Prosper’s revenue model is to earn 1.5% in fees for each loan, 1% from the borrower, and 0.5% from the lender. So the total revenue earned by Prosper on the initial $7.7 million loaned is just a shade over $100,000. The company has raised $20 million so far from venture-capital funds, so it will be interesting to see how they can use that capital to grow their business. -dr