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Prosper P2P platform Offers Better Returns than Bonds and Stock Markets

Prosper is emerging as one of the best P2P platforms amid its reliable business model and extensive product categories. Although this peer-to-peer platform offers several types of loan categories to facilitate borrowers, they also grade borrowers through prosper grade for convince of lenders.

The rate of return on each loan type depends on the grade of borrowers along with the loan type. These initiatives are not only offering convenience to borrowers, but these steps are ensuring the safety of investors money.

The company has generated strong revenue growth over the years along with expanding its presence in different loan categories.

Prosper is working on multiple business strategies to set their business for the long term sustainable growth. For instance, the company has developed a new digital HELOC product that is rolling out in 2019. This product would enhance consumers experience as it will remove the complications and time-consuming barriers in applying for a Home Equity Line Of Credit.

 

Source: Prosper Website

The rate of returns is significantly higher when compared to returns from long term government bonds and volatile stock markets. Government bonds are yielding in the range of 2% to 3.5%, which is a very low return compared to investments in other assets. As shown in the above chart, sometimes returns from stock markets are higher than returns from investing in Prosper, but the stock market returns are not fixed and come with a lot of volatility and risks.

Garret/Galland Research

Source: Forbes

Investors can enhance their returns if they have a high-risk tolerance. Indeed, the rate of return stands around 4% on low-risk investments. The rate of returns increases to 12% if the investor decides to lend money to low-grade borrowers.

Its financial numbers indicate that the platform is safe for both borrower and lenders. It has generated revenue of $176 million in 2018 while it has improved Adjusted EBITDA to $9.4 million in 2018 compared to $5.5 million in 2017.

Interested in reading more about Prosper? Read our full Prosper P2P platform review here.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.