It wasn’t too long ago when I started writing about social media and creating a movement, a paradigm shift in thought and actions of others. It hadn’t dawned how predominate of a social movement is already underway. We see charities, acts for legislation and reform, green communities, niched social platforms.

However the one social movement that I see really taking shape is the act of social lending. What exactly is social lending? It’s simply a group of like minded investors making a positive shift to correct the missing gap in our current financial markets.

Using the power of peer to peer networks and spreading the diversity of risk across small micro loans the investor once again takes the position of the bank. At the very same time the exposure to defaults are reduced since investors pool monies together and diversify across many transactions versus being the entire lender on one transaction.

Most of these networks use unsecured lending as their revenue platform. Short 1 to 3 year terms with interest rates just over 7% and up to 23% being the average. Sure the same restrictions apply, deal structure, credit rating, lender approval, the biggest differences are speed of execution, personalized deal structuring and minimized lending amounts to keep the system stable.

I found a couple of articles on these subjects and I thought that these would appropriately discuss both the positives and negatives of this emerging social culture of investors. The impact on the lending industry as well as the long term evolution of this new and exciting marketplace.

The first article I found is titled “Social Lending Networks, New Alternative to Banks” written by LAURA MARQUEZ

Next we head on over to “Guide to Social Lending Networks” written on the bargain engineering blog.

Lastly we take a look at the impact of social networking to see the disruption of our current lending system.  “Social Networks Disrupting Money Lending”"

After you spend a few minutes learning and understanding all about the topic at hand take a look and see how these social networks diversify their lending courtesy of http://www.sociallending.net/

Social Lending Graph of Diversification

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• Review Of Lending Club Progress A few months ago I decided to give social lending at Lending Club a try (my Lending Club review). I was intrigued by Lending Club's business model, and having a little experience on the other side of the loan officer's table, I thought maybe I could score a decent return. ......
• Prosper 50 Best Websites 2007 By Time Time names Prosper one of 50 Best Websites 2007. Prosper is a community of lenders and borrowers—or social lending network—operates outside of any bank, so the rates are better. Post a request for a loan, including desired amount and the maximum interest rate you'd be willing to pay; potential lenders......
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Yes you can obtain credit in a down market with the proper mindset, motivation, and knowledge. Where do you start especially if you need to acquire it fast and you don’t have many resources. This is a quick guide to preparing for the individual or the corporate credit seeker.

If you want the simple truth you need to be in a tip top shape financially and have the ability without a shadow of a doubt that you are financially able to repay the debt you are borrowing. This is nothing new from previous markets, the new rules are the same when it comes to borrowing.

The new way to obtain credit is to prove that you really don’t need it, however this has been the case since bartering and credit has evolved. People always have said you need credit to get credit and you need money to make money right. It’s no different today.

Guidelines have become tighter and banks and lending institutions started lending less. So with all of these odds against you what do you as a prospective borrower are crucial for your success.

First off you need to have your financial affairs in order, secondly is your credit accurate, have you reviewed it within the last three to six months to ensure that everything on it is accurate? This should always be the first step before applying for any credit.

If you are trying to obtain credit for the first time or after a financial hardship such as bankruptcy or divorce you have some “sub-prime credit card companies” out in the market place who can get you started with a low balance & a higher interest rate.

Now remember these are for reestablishing as well as rebuilding credit. You can always obtain new lower costly credit after six months to a year. Obtaining credit in a down market isn’t as difficult as one might think. The down marketplace makes obtaining credit more challenging and difficult.

However the rules are still the same. Recently I applied for some new credit and I was able to obtain a new line of credit from my credit card company with less than perfect credit. I was able to do this because of the relationship I have established with my current credit card company.

I have also have closed several mortgages which is an indication of banks starting to work through there financial crisis. There is always a way to obtain what you need more than what you really want however people have always seemed to find a way to get what they want rather than what they need.

Now that credit is tighter and banks have cut off a lot of equity lines, credit card companies have folded and new laws on the horizon only time will tell what new requirements will be placed on both businesses and consumers.

Always remember to keep your financial house in order and to keep all of expenditures tracked and allocated. Keep tabs on your credit to ensure your identity is protected. Also optimize your spending so that you can keep enough in reserves to ensure ongoing success with debt elimination.

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