The now ubiquitous "2.0" label for every business, product and service that has evolved (or been revolutionized) into a connected, flexible, more direct, fast, simple and progressive manner of doing things now applies to:
Borrowing 2.0
&
Lending 2.0
Social (peer to peer) lending will grow substantially over the next 20 years and it will be a great way to invest while helping other Canadians directly.
Within the new Canadian CommunityLend social lending and borrowing exchange, the CLCFC community will identify the best borrowers and be part of making to them personal, unsecured loans at rates that they can't get at traditional banks and credit unions. At the same time making returns to the lenders that exceed other money market investments for the average Canadian investor. I intend to build this lending community, CLCFC, into one of its most responsible, responsive and successful communities based on principles of responsible lending coupled to the liberal value of social lending.
If you're not familiar with CommunityLend I suggest you visit there soon (whether you are a lender or a borrower) to learn more about the new wave of social lending. It's not yet in business but will be soon. You can also visit the US www.prosper.com which has been running for a few years. Visit the "performance" section to see how different categories are doing. Try the "lending" section to see how the lending process looks.
Social lending requires trust. It also requires work. Each and every qualified borrower still needs a bit more analysis and vetting before committing to bids on their loan request. It requires asking them questions (within CommunityLend), analyzing their financial situation, credit report, cash flow and their "business case". (See Note 4., below).
While I want to invest in as many good loans as possible, I can't possibly do all the work myself. I am looking to build a good community lending team who also want to make responsible, performing loans and make a reasonable return on our money. That is what CLCFC is all about.
As long as I have cash available, I will always bid on the same loans that CLCFC community members agree are good opportunities for this lending community.
No CLCFC member will be obliged nor pressured to invest in any loan if I or other members are investing in it. You always decide for yourself if the loan is right for you. And you can always go rogue if you choose and bid on loans that don't interest other CLCFC members.
Very important: I will not be "handling" or touching your money at any time (even if you ask me to, I won't). A lending group simply has more bidding clout by divvying up the work and identifying the best loans with the least risk. Your money is under your control at all times going in, bidding, receiving payments and coming out.
If you are a CommunityLend lender (or will be soon), join the CLCFC lending community and let's set about being better than big-banks by helping other Canadians with competitive capital.
Value proposition for lenders and borrowers: Unlike a bank or credit union, CLCFC has no overhead (other than our own homes and PC's that we'd have in any case), no operating costs, no salaries and no infrastructure. The difference means that as investors there is more room for a better return and for borrowers there is more competition to offer a better rate.
Both parties win.
Please e-mail me to join CLCFC, what I am sure will become the best lending community in CommunityLend for borrowers and lenders alike.
If you're not sure about what social lending or community lending group means, please visit CommunityLend.
Note 1: I do not represent "CommunityLend", I am simply a lending member and a lending community leader. This blog is my blog and I am responsible for its content.
Note 2: as CommunityLend is not yet operating and I don't have the community lending group terms on hand, I can't yet comment on lending group leader benefits and what I will do with them. Be sure that my goal is not to take advantage of you or anyone, solely to build the best lending group with the best returns for all of us.
Note 3: I am not making any promises on returns. Social lending is unsecured and it carries risks. The idea of a community lending group is to identify the best borrowers in order to reduce the risk. The objective is of course win-win-win for everyone from the borrower to the lenders. I am personally aiming for an average return of 5% above inflation.
Note 4: What do I define as a "good" CLCFC borrower?
- A credit rating of AA, A or B (in the "prosper.com" sense; I've yet to see the CL rating system, but I am looking at the top rated borrowers only as there is no collateral, but there is risk to the borrowers credit rating if he defaults. AA, A and B borrowers are more likely to care than lower rated borrowers).
- Homeowner, professional, graduates entering the work place
- Steady job with debt service appropriate to income
- Borrower provides a clear presentation of loan request including positive purpose
- Borrower provides a clear presentation of expected expenses and cashflow during the course of the loan
Note 5: In order to work with CLCFC, you will first need to setup your account on CommunityLend. Plan on a few days to get this set up. In the meantime, please e-mail me with your comments and intent. [CommunityLend will 'open its doors' soon. Please join the list of CommunityLend pioneers by sending an email to CommunityLend info email or visiting CommunityLend and they will keep you informed as to their progress.]
Note 6: There are no fees or costs to join CLCFC other than your own cooperative efforts. CLCFC members are expected to be active and share the work in vetting loan requests to the goals of the group and providing summaries of "positive" loan requests.
Collectively we benefit from the effort, experience and expertise of the whole CLCFC community. Individually we trust one another so that we can make our investments wisely.
Note 7: [2008.05.24] As it is yet not perfectly clear how the securities commissions in each province in Canada will impose limitations of various kinds, the ability of CLCFC to function as describe above is not yet certain. However, one way or another, CLCFC will maintain itself as advocate for social lending and we will find a way for conservative, social minded lenders to work together for the benefit of the group.
