Using loans to fund your web business?

I have the feeling many of the lenders are folks used to earning CD rates on their savings so the offered rates look wonderful. I certainly thought that at one time and learned some VERY expensive lessons about how hard it is to get paid back.

One thing about their program that looks attractive is the opportunity to spread your money over several loans and spread out the risk.

I mentioned earlier I had some experience in the sub-prime car loan market. I can say with absolute certanty that if you have not had first hand experience with these kinds of loans you will make mistakes because you will not understand the mindset of the borrowers. As the guy I work for says "If they could manage their money they wouldn't be our customers."

 

Exactly. And, I'm thinking how wonderful it would be to bring another class of loan seekers to these lenders at Prosper.

 

That's a very interesting thought. Given a little time, some of the lending groups are going to take serious losses. A group that was able to successufully fund the webpublishing niche and profit from it would really stand out.

Paul Graham at paulgraham.com has written some interesting essays on how the reduced capital requirements of new software startups has impacted the traditional venture capital community. In brief, they tend to need so little money (relative to startups in the past) the VC investors are having trouble cracking the whip like they are used to.

I've just been "shooting from the hip" with my comments so far; I need to dig deeper into the prosper.com site before I say much more

I can imagine that if done properly, there could be a lot of happy investors and borrowers for website investments.

 

Have you guys had a chance to read my prosper post?
I was wondering if you thought my strategy of using the funds ($3000) to invest in a dedicated server, and purchase established websites with revenue made sense?
I'd really appreciate your guys input.

BTW, I haven't even created the "contact us" email yet

 

I thought the listing looked really good. Apparantly the lenders did too, as they funded you very quickly. Of course you can get into a dedicated server for $100-$200 a month, if you need it. Use the cash to buy some good sites.

 

Tomorrow I'm to tired to think anymore.

 

Taking risks is good, and as you said the best thing to take out a loan for is to buy an established site that you know will get you your money back + interest in about a year and a half.