Unfortunately, not all states allow investors to participate in p2p lending. I have written about this situationbefore but the bottom line is that every state has its own securities laws and some are more strict than others.
New potential investors want to know this: Is my state approved for investing with Lending Club and/or Prosper? To answer that question definitively I decided to create an easy to read map that will show everyone their different options.
The Definitive Map for Investors in Lending Club and Prosper
We have scoured through the most up to date information at Lending Club and Prosper to create this map below. We have color coded the map to make it easy for you to see where your state stands. And you can zoom in and out easily as well as drag the map to see where the different states stand. You can also click on each state for a quick summary of what is approved. And if you want see a slightly larger map just click here.
State approvals by color
Lending Club & Prosper
Lending Club only
LC Foliofn only
Explanation of the P2P Lending State Availability Map
Lending Club and Prosper (red) – these states have no restrictions. Investors can choose between Lending Club and Prosper.
Lending Club only (yellow) – available only to investors in Lending Club. Keep in mind that Kentucky is restricted to accredited investors only.
Prosper only (green) – available only to investors in Prosper.
LC Foliofn only (light blue) – Lending Club has a secondary classification. These are states where investors are not allowed to invest in new loans but can buy loans on the trading platform run by Foliofn.
Not approved (dark blue) – unfortunately investors in these states are out of luck and cannot participate at this time.
Before you go and sign up at these platforms you should know that there are financial suitability requirements for investors regardless of which state you live in. Here are links to the requirements in the help sections at Lending Club and Prosper.
Good News is Coming for Ineligible Investors
There are many people who live in places like Ohio and Maryland that have been unable to participate in Lending Club or Prosper. There is some good news coming for these people. Lending Club is planning to do an IPO some time later this year that will change the landscape considerably.
Once the IPO has been completed Lending Club will be able to take advantage of something called a blue sky exemption. This exemption will allow residents of every state to invest in loans originated by Lending Club. This won’t happen overnight but they will be able to file with each state and eventually should be open to investors in all 50 states.
Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.