P2P Lenders Becomes Latest Industry to Attract Affiliates

Last week we posted about the launch of Even Financial, a P2P lending firm focused on the supply side of the industry. Their goal is to bring added efficiency to attracting borrowers (supply) to use P2P lending platforms for sourcing their loans. Even Financial’s launch occurrs as their CEO Ian Rosen explained to Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates that currently investors outstrip borrowers by a four to one ratio in the sector. As a result, investors are seeing the profit potential of providing funds on P2P lending platforms, but there is a gap in borrowers to satisfy this demand.

Affiliates Affiliates Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers compensate affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition The bro Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers compensate affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition The bro Read this Term

Aiming to attract borrowers, P2P lenders have also begun to search for partners to promote their businesses. One such model is via affiliate deals, where website owners or financial institutions receive a percentage of future revenues for referring customers to a P2P lender. The attraction of affiliate driven customer flow is that it is primarily performance based, with partners only compensated after providing leads or customers that finalize loans on the platform. The lower upfront cost is important for the P2P lending sector as other marketing channels such as with search marketing, are fairly expensive when targeting ‘credit’ and ‘loan’ related search keywords.

Following this trend, a recent partnership was formed between P2P lending platform provider Lending Club and HomeAdvisor. A home improvement website, HomeAdvisor provides users with assistance in design, finding pre-screened professionals to contract for work, and other building related information. With their multi-year partnership, Lending Club will become the exclusive provider of loans marketed to HomeAdvisor users that are seeking financing for home improvement projects.

The partnership puts Lending Club in front of prospective borrowers who arrive at HomeAdvisor with a specific loan type that they may be interested in. For investors, adding a specific subset of borrowers is a benefit as it is easier to analyze potential loans when they are in similar categories and conditions can be compared.

About the deal, Adam Burrows, SVP of Corporate Strategy at HomeAdvisor stated in the firm’s joint public statement with Lending Club that “The partnership with Lending Club is a valuable addition to our existing offerings and will enable homeowners to seamlessly get pre-approved loans to help them achieve their goals of home improvement."

Beyond just websites, we are also seeing interest from existing financial firms seeing a potential in marketplace lending. With many banks cutting back on their lending habits following the application of increased capital requirements in the aftermath of the 2008/9 global financial crisis, they have looked to alternatives to monetize their customer bases.

Among opportunities is through partnering with P2P lenders, and referring borrowers to them that don’t fit their lending requirements. In such a deal, RBS, the UK’s largest small business lender with 33% of the market announced in January that it was partnering with P2P lenders Funding Circle and Assetz Capital. Under terms of that deal, RBS began to refer small business customers seeking loans to the P2P lenders who don’t meet the bank’s loan criteria. Beginning with the two P2P lenders, RBS aims to create a lending marketplace of sorts with a goal to ultimately add additional platforms to bid on business from their referred clients.