Monday, March 23, 2009

Peer to Peer lending


By Michael Boshnack


"Michael DeFabio and his wife, Amy, were waiting for a miracle. The co-owners of the Natural Health Education Center say they were repeatedly refused funding for their holistic health care company. "We didn't have enough collateral," Michael says. "The banks strung us along for three months before turning us down."

After starting the Webster, New York-based company in 2005, DeFabio needed a boost in capital to get his latest product on the market. He took to the internet in hopes of finding a solution. After discovering the concept of social lending--also known as peer-to-peer (P2P) lending or Banking 2.0--DeFabio was drawn to P2P site Lending Club in November 2007. Within a matter of weeks, the 49-year-old naturopath physician fulfilled his loan request of $15,000, and was on his way to producing his B12 lozenge."


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