With many banks reluctant to lend and more people needing to borrow, a new type of website is gaining popularity.
It allows those with money to lend to hook up directly with those looking to borrow.
Ava Pierre is a new kind of investor in a new kind of investment. She's not investing in stocks, she's investing in people.
"People are coming to Prosper with a definite need," Pierre says. "You're fulfilling the need and you can do it with a small amount of money. So I thought it was really cool."
She's talking about a Web site where lenders and borrowers meet online, with no bank needed. If you need money, you tell your story. If you have money, you offer to lend it. Deals are stuck when they agree on a rate.
In short, this is the eBay of lending.
"We're changing the way people are, the way they think," Pierre says. "People are getting them out of that old mentality that I'm always going to be broke and they realize they don't always have to be broke. "
The best way to reduce risk is to lend little amounts to lots of borrowers. Minimum loan is a hundred bucks and maximum length is three years.
This may be borrowing without bankers, but it isn't borrowing without middlemen: these websites charge a percentage to both borrowers and lenders.
