Open any news site and you’ll read how the Marketplace Lending sector is ramping. US companies like Lending Club and Prosper are underwriting billions of dollars of loans every month now. But when you read stories about the industry, the media frequently focuses on borrowers. Typically, on online lending platforms like these, these are relatively high quality borrowers drawing money to consolidate their credit card debt, pay for weddings, college for their kids, and to make home improvements.
But, because these are marketplaces, for everyone who borrows, there’s a lender. An investor on the other side. Who are the investors on these platforms? A big percentage of the money coming in is from professionals — hedge funds looking for an investment with an appropriate risk-return profile.
But what about the individual investors — why do they come to these platforms? Why are they investing on marketplace lending platforms vs. other options for their investment dollars?
I think that’s a similar question our next guest grappled with and why he co-founded a new lending platform, Income&. Brad Walker’s professional experience was in hard-asset lending and few years back, he saw an opportunity to provide a different type of investment to investors — a marketplace loan backed by a mortgage. He believes investors, primarily in and entering retirement, require the regularity of a fixed income investment but also the security of the asset backing it and so, he and his partner set out to build a new marketplace lending platform to provide these types of investments.
Income& has even productized these investments, mortgage-backed marketplace loans — they call them PRIMOs and they’re fractional promissory notes like you’d find on the other marketplace lending platforms, except these are backed by prime-rated mortgages.
Join us as we talk about how as a country, a rising number of retirees require different solutions at a time when saving your money in the bank just doesn’t get you where you need to go. Will we see more flavors of online lending and new products like Income&?
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- Income& (Brad’s company)