Posts Tagged Wall Street Journal
Credit Crunch Woes = Innovation
Posted by YadYap in Innovation, Underserved Borrower on December 8th, 2008
The recent credit crunch and economic woes are not only being felt by some of the biggest companies in the world, but are affecting access to credit for nearly everyone. A recent article found on WSJ.com titled Credit Crunch for Consumers by Andrea Coombes of Market Watch details the steps many credit companies are taking and the tightening effects felt by the average consumer.
Along with some pain, a recession is a time when innovation thrives. There was a great article written during the recession of the early 90’s by James Richardson titled Reaping Innovation from Recession. Quoted from this article:
The worst thing that could happen would be for this recession to end too quickly. That is because recessions — despite the pain — are times of creativity and entrepreneurship. They are times when the country renews itself.
At YadYap we are committed to bringing innovation to the payday loan industry, and the current recession won’t stop us; in fact we are motivated more than ever to offer a better product than exists currently in the market. To quote James Richardson again:
New growth comes when new companies refine older concepts and produce something better or cheaper.
Related articles
- Personal Finance Roundup [Money] (consumerist.com)
- The Credit Crunch Crisis Visualized (crenk.com)
- What’s Worth Paying for in a Recession (lifehacker.com)
- Nouriel Roubini: Financial Crisis Far From Over (usnews.com)
- FICO Confirms: Reduced Credit Lines For Good Borrowers [Credit] (consumerist.com)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_c.png?x-id=82c48bbd-ec59-4c82-904d-804c491a02a1)
P2P Liquidity Concerns at Prosper and Lending Club - No Problem for YadYap
Posted by YadYap in Payday Lender, Peer-to-Peer Lending on October 21st, 2008
In an online Wall Street Journal article titled “Peer-To-Peer Lenders Get Into Secondary Market” Arden Dale discusses the reasons for, and benefits of having a secondary market is association with peer-to-peer lending platforms. Here are the main take-aways from the article as well as how YadYap’s system differs.
- Prosper and Lending Club both saw the need and demand from current lenders to have a secondary market to create liquidity.
- A secondary market is a great option to give lenders, but overall costs to lenders will rise.
- Yadyap’s model creates almost instant liquidity by offering short term 2-4 week payday loans. No secondary market is needed to achieve liquidity for lenders.
I am sure it was apparent to the founders of both Prosper and Lending Club before they launched that there would soon be a need for liquidity. The lenders within both platforms have now shown a demand for it and both companies have responded well. There just simply are not too many people out there that want large amounts of money tied up for three years. We commend both Prosper and Lending Club for taking the initiative and paving the way for liquidity in the new world of P2P lending.
The secondary market is critical for the growth of these traditional P2P platforms (assuming P2P has been around long enough to use the word traditional). With this new addition, however, will come more expenses for lenders. Currently there is a 1% fee to sell a note on Lending Club. These fees are necessary and in relative terms small, but none the less, they are costs that will reduce lenders overall returns.
YadYap offers short term (2-4 week) payday loans. This model provides almost instant liquidity for lenders. Active lenders with multiple loans outstanding will have the luxury of seeing loans turn over daily and will have those funds available in their account to fund new loans.
We are excited to see our system play an important role in the peer-to-peer lending world. We believe that lenders will experience the excitement of the YadYap model within weeks of placing their first loans!
Related articles
- lending club, my best investment of 2008 (bripblap.com)
- Peer to Peer Lending: Harvard Business Review Breakout Ideas of 2009 (bargaineering.com)
- Peer to Peer Lending Offers High Returns In Low Rate Environment (frugaldad.com)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_c.png?x-id=d2f7e4e5-039b-44ba-9108-386857333295)