If you truly believe in the power and accuracy of your P2P lending algorithm shouldn't you be willing to take a first-loss position? Given the recent controversy and investor retrenchment in the online lending space, that's exactly what P2P lenders Platform Black and Investly plan to do. As of June 1, Platform Black, an invoice auction website, will cover the first 10 percent of any losses faced by an investor.
“I stand by my belief that, if I wouldn’t put my own money into an auction, then I wouldn’t expect an investor to do so either, so from 1 July, we will be the first to invest in every auction,” said Platform Black Managing Director Caroline Langron, explaining that the company will also contribute a 1 percent financial invoice in every invoice auctioned through the site. Platform Black allows companies to upload their outstanding invoices to the platform, on which investors bid so businesses can access working capital instead of waiting to get paid.