I'm interested in investment through Prosper or Lending Club, but both are not available in Maryland where I live.
Is there any other alternative that I can invest quite safely?
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Crowd funding could be a good option. But how viable it is for your needs, I cannot comment on it. A google for crowd funding gave me a number of websites, but I believe you have to figure out which one is best for your needs and available in your state.
Peter Renton's Lend Academy blog is a great resource for those interested in P2P lending, but it gives a somewhat misleading impression for why investing is available in some states and not others:
Apparently even though p2p lending is regulated by the SEC, it is still up to the states to decide if they want to allow this kind of investment.
I recently asked Maryland's Office of the Attorney General why P2P lending was not allowed here, and received this surprising response:
There is no provision that prohibits peer to peer lending (“P2P”). Such lending companies are permitted to operate in Maryland in compliance with the State’s securities registration requirements. Two companies, Prosper Marketplace, Inc. and LendingClub Corporation, filed to become registered but, in May 2010 and March 2010, respectively, these companies abandoned their filings in Maryland and chose not to pursue registration.
Since that time, Prosper Funding, LLC, and later both Prosper Funding, LLC and Prosper Marketplace, Inc., as co-issuers, have filed a registration application in Maryland; the status of that application is the companies have asked for additional time to respond to the Division’s questions.
Any company that wants to conduct P2P lending may do so provided the company does so in compliance with Maryland law. The timetable for those companies to become registered is up to them, but won’t happen unless they file and pursue their applications for registration.
I've asked Lending Club whether they intend to ever register in Maryland and have not yet received a response. But it appears that Prosper is at least working on registration.
Can you buy notes from secondary transaction platform foliofn? I am not sure if MD allows using secondary platform transaction. If you are really interested, you can collaborate with some acquaintance in states that permit p2p notes and purchase notes through foliofn from them. It will cost you additional 1% but in my opinion worth the opportunity.