Prosper Marketplace Loan Origination Growth Rate Slowing

Peer-to-Peer Lending Company Prosper Marketplace saw a decline in the amount of new loans that the company is originating for the second consecutive month during February.

Prosper Marketplace issued a total of $1.7 million in new loans during the abbreviated month. During the month of January, Prosper Marketplace issued $1.9 million in new loans. The company originated just over $2 million in new loans during the month of December, marking a 15 month high in loan origination.

During the last two quarters, Prosper Marketplace has been running aggressive ads online to market their peer-to-peer lending service, but growth from its ad campaign and other marketing initiatives appear to be slowing.

Prosper was originating more than $8 million in new loans each month at its peak. Its growth in loan origination came to a halt after it was forced to temporary shut-down its service as it worked with the Securities and Exchange Commission to register the loans being offered on its website as securities.

Since the company resumed operations during the summer of 2009, the growth rate in new loans has been anemic at best.

The news comes as many fear that the company’s bankruptcy is imminent. We reported that the company recently took out a $2 million bridge-loan that it must repay in full in April if it does not receive another round of venture capital. Many believe that the company is running low on operating capital and will be forced into bankruptcy if it does not receive another significant round of venture capital soon.