SOURCE: Prosper.com

Prosper.com

May 31, 2011 08:00 ET

Prosper.com Reports Double-Digit Compound Monthly Growth for Eight Consecutive Months

Strong Lender Returns Drive Growth of P2P Lending Marketplace

SAN FRANCISCO, CA--(Marketwire - May 31, 2011) - Prosper.com, the world's largest peer-to-peer lending marketplace with over one million members and $233 million loans funded, today released its monthly loan Market Survey report for April 2011. Prosper continues to post strong growth, reporting a compound monthly growth rate of more than 14.5 percent over the last eight months.

The strongest month-over-month growth continues to be in the small business loan category, with a 19 percent increase in April 2011 and an 85% increase from six months ago. Debt consolidation remains the leading loan category on Prosper.com. And, as home equity lines of credit from banks remain scarce, home improvement loans hold steady as one of the top loan categories in the Market Survey.

"Our powerful combination of strong lender returns -- the best in the P2P category -- and our best-practices credit risk management model has helped us drive the industry's best month-over-month growth rate," said Chris Larsen, chief executive officer and co-founder of Prosper. "Lenders are drawn to a model that allows for strong returns and a risk management model based 100% on real P2P performance data."

Prosper was founded as a way to bring a more efficient, transparent and trustworthy process to consumer finance, removing the barriers of traditional consumer financing. For lenders, Prosper delivers a new asset class with annual returns averaging 10.4%*, the best in the category.

To learn more about our lender returns, competitive personal loans and small business loans and other market updates, please visit http://www.prosper.com.

Prosper Statistics for April 2011:

Prosper RatingBorrower RateEffective Lender YieldEstimated Annual Loss RateEstimated Annual ReturnAverage Loan AmountLoan Volume% of Funded Loans
AA7.01%6.01%1.49%4.52%$10,169$650,81913%
A9.81%8.79%3.45%5.34%$9,369$477,81410%
B14.23%13.00%5.63%7.38%$8,042$683,54614%
C19.35%17.92%8.39%9.54%$7,839$713,38314%
D25.60%24.00%10.51%13.49%$6,278$1,531,94431%
E31.15%28.77%14.70%14.07%$5,155$572,20411%
HR31.69%28.89%18.30%10.59%$3,226$383,8828%
Total20.34%18.77%8.77%10.00%$6,554$5,013,591100%

* Net Annualized Returns represent the actual returns on Borrower Payment Dependent Notes ("Notes") issued and sold by Prosper since July 15, 2009. To be included in the calculation of Net Annualized Returns, Notes must be associated with a borrower loan originated more than 10 months ago; this calculation uses loans originated through May 31, 2010. To calculate Net Annualized Returns, all payments received on borrower loans corresponding to eligible Notes, net of principal repayment, credit losses and servicing costs for such loans, are aggregated then divided by the average daily amount of aggregate outstanding principal for such loans. To annualize this cumulative return, the cumulative number is divided by the dollar-weighted average age of the loans in days and then multiplied by 365. Net Annualized Returns are not necessarily indicative of the future performance of any Notes. All calculations made as of March 31, 2011.

Definitions

Borrower Rate: The interest rate borrowers pay on their Prosper personal loan.

Effective Lender Yield: Effective Lender Yield is equal to the Borrower Rate: (i) minus the servicing fee rate, (ii) minus estimated uncollected interest on charge-offs, (iii) plus estimated collected late fees.

Estimated Annual Loss Rate and Estimated Annual Return: Estimated Annual Return is the projected average annual return on funds invested in all loans with a certain Prosper Rating originated on our platform during the month. Expected Annual Return is calculated by subtracting the Estimated Annual Loss Rate for those loans from the corresponding Effective Lender Yield. The Expected Annual Loss Rate is the estimated principal loss on charge-offs for loans originated during the month, and is based on the historical performance of Prosper loans for borrowers with similar characteristics. The calculations of Effective Lender Yield, Estimated Annual Loss Rate and Estimated Annual Return require significant assumptions about the repayment of loans, and lenders should make their own judgments with respect to the accuracy of these assumptions. Actual performance may differ from estimated performance.

Loan Purpose: Borrowers who post listings in the Prosper marketplace are asked how they intend to use their peer-to-peer lending personal loan. The loan purpose reflects borrowers' statements of intended use of loan proceeds and is the percentage of total dollars funded for the month. Prosper does not verify or confirm after funding how loan proceeds are used.

About Prosper
Prosper Marketplace Inc. is America's first peer-to-peer lending marketplace with over one million members and more than $233 million in funded loans. Prosper allows people to invest in each other in a way that is financially and socially rewarding. Borrowers list loan requests between $2,000 and $25,000 with loan terms of 1, 3, or 5 years. For example, if you take out a loan for $5,000 for three years and you have a Prosper Rating of B and one or more previous loans, your APR will be 16.15% and your scheduled monthly payment will be $170.86. Individual and institutional investors invest in minimum increments of $25 on loan listings they select. In addition to credit scores, ratings and histories, investors can consider borrowers' personal loan descriptions, endorsements from friends, and community affiliations. Prosper handles the servicing of the loan on behalf of the matched borrowers and investors.

Prosper was co-founded by Chris Larsen, co-founder of E-LOAN. Prosper has raised $57.7 million in venture capital and is backed by financial and technology luminaries including, Jim Breyer of Accel Partners; CompuCredit; Omidyar Network; Capital One Co-founder Nigel Morris of QED Investors; Court Coursey of TomorrowVentures; and Larry Cheng of Volition Capital.

Notes offered by Prospectus.

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