It's a popular notion recently to say that "Wall Street is dead." It may be true that Wall Street as we once knew it has been irrevocably changed, but let's not jump to Chicken Little conclusions about that like "no one will ever be able to get credit anywhere." As traditional sources of finance dry up, this creates a market opportunity for entrepreneurs to develop new, risky (but innovative) methods for lending and borrowing.
Here's one such new entry. And here's a tidbit from the press release about this new site, Loanio.com:
Borrowers with poor or no credit scores will be permitted to participate on the p2p lending platform by using a Co-Borrower or guarantor. According to CEO and Founder Michael Solomon, "...only around 10% of borrowers on p2p lending sites wind up getting a loan. Many of them have less than stellar credit profiles. With options for these borrowers drying up elsewhere, we believe this feature and others on the website will fill a sorely needed void in the p2p lending arena."
I can't say it's a particularly popular time for lending to people with bad credit, but I wish Loanio better luck at making this work than other people. Of course Loanio's loans won't be securitized, so they don't risk those same problems that are wreaking havoc on the world's financial systems. This may be the first of many steps that entrepreneurs will take to reform the credit economy in light of its obvious problems.