Prosper Marketplace, the company behind the peer-to-peer lending site, Prosper.com, has announced a net loss of $2,238,138 for the third quarter of 2009.
This news bodes particularly poorly for the company as their cash reserve is running low. As of September 30th, the company only had $2,079,624 in cash reserves remaining from the $40 million worth of venture capital that they had received in their last round. The company recently took a $1 million bridge-loan from a banker, but at the company’s current burn rate, it will need another major round of venture capital soon.
Prosper.com has had a particularly rough 2nd and 3rd quarter because they were unable to originate new loans during May and June because of litigation from the SEC. Since the company got its legal documentation in order with the SEC, loan growth has been anemic at best since then. During the month of September, Prosper.com had under $2 million in new loans, a far cry from the $7-$10 million in new loans that the company was originating each month during its hay-day.
The circumstances and timing of the need for new capital are less than ideal. The current economic environment has made it difficult for start-ups to get new money and Prosper.com has still yet to deal with its high rate of delinquencies and lower than expected rates of return for its investors.