Crazy Peer Lending Marketplaces That Work

As the peer lending ecosphere grows so does the concept. There are still new peer lending marketplaces forming, many of which have unique twists. The traditional peer lending marketplaces provide borrowers with loans at an affordable rate while providing investors a return better than that of a typical savings account. Non-traditional marketplaces feature interesting nuances that might sweeten the returns even further for investors.

We’ve compiled a short list detailing some of these “crazy” marketplaces. We’ll start with our personal favorite.

Kickfurther allows businesses to replenish their inventory by enabling investors to invest in their inventory. It has been compared to Kickstarter but with cash returns. Although it’s fairly young there are many reviews¹ and a subReddit² that the company directly responds to.

Positives

• If a business fails to pay back the loan Kickfurther will pursue legal action on your behalf.
• If money can not be made back you can gain profits by selling off their inventory by liquidation or take their inventory as compensation.
• The marketplace offers partial payout dates and final payout dates to let you know when you should expect your investment back.
• The return is fairly high when the loan pays back.

Negatives

• In order to deposit your profits into your bank account, Kickfurther charges a 1.5% fee.

Point is a marketplace for investors and homeowners who want to sell fractional equity in their homes. The point is to allow investors to invest in fractional interests in primarily owner-occupied residential homes.

Positives

• Investors receive a share of the home’s appreciation either at sale or when the homeowner refinances.
• If homeowner/borrower wishes to keep their home they can do a HELOC or reverse mortgage, no downsides to the investor and no penalty to them.

Negatives

• Borrowers are only in coastal regions of California.
• Investments for the Point Homeowner Agreement can be anywhere from 5 years to 30 years.

With more and more musicians emerging LIVAMP allows accredited investors to fund these aspiring musicians dreams of being the next greatest musical artist.

Positives

• If your musical investment makes it to the big leagues you will have rights to either the publishers copyright or the master copyright (whichever you decide to invest in).
• Musicians get royalties from downloads, merchandising, live concerts, and the list goes on, which contributes towards your investment gains.
• Royalties are distributed to investors on a quarterly basis.

Negatives

• There is no guarantee that the musician you invest in will flourish or you’ll achieve any return.
• There is no secondary market to liquidate your investment.

This auto loan marketplace is funded by accredited investors. The automotive industry is here to stay – even with self-driving cars not too far around the corner. Just like Kickfurther it is fairly young and is growing quickly.³

Positives

• The loans are secured and can be trackable through VIN registration.
• If the loan is not repaid the car can be repossessed.
• They have been reported to have higher returns than auto loans funded through other marketplaces.

Negatives

• You cannot purchase fractions of a loan and are required to purchase the loan as a whole.
• There is a high minimum to start investing on their marketplace.
• You do not have the option to liquidate as there is no secondary market for liquidation.
• There is a 4% service fee per loan.
• Investors cannot invest their IRAs as of yet.

Instead of investing and owning real estate, commercial or residential, you can invest in borrowers that flip houses for a living. Fund That Flip is also funded by accredited investors.

Positives

• They provide downside protection in case the borrower does not complete the flip and pay out the loan. Each loan is associated with a first position lien on the underlying asset (real estate) in case the redeveloper defaults on their loan so you could possibly recoup some percentage of your investment.
• They choose qualified borrowers based on past experience on this marketplace. Most borrowers are professional house flippers.

Negatives

• The spread of the fee you pay for in each note (loan servicing fee) isn’t disclosed until you purchase the note.

Every peer lending marketplaces has its upsides and downsides but that shouldn’t deter you from investing on some of these remarkable platforms. It’s only a matter of what kind of investment seems worth it to you.