On-line peer to peer lending is nothing new, most people have heard of sites like prosper.com and more recently Kiva.com that exist as a market place to link people who have money with those who needed it. These types of sites have mostly stuck to smaller loan amounts between $2k and $25k with short durations of repayment, usually 1-5 years. Kiva even does microlending for loans as small as $25.

Now there is a new on-line outfit focusing on real estate financing although with a very different business model than that of Prosper and Kiva. Money360 has moved from its original business, direct real estate lending in California, to an internet marketplace for private, residential and commercial real estate lending. Money360 is focusing on a more sophisticated clientele.

Many of its investors have extensive involvement in real estate as developers and operators as well as investors and are often looking to invest in the same types of property with which they have had hands on experience. The company claims its lenders represent a potential pool of more than $500 million for residential and commercial real estate loans. Potential borrowers are put through an on-line screening process to qualify them by experience, abilities and capacity and their loans by size and the quality of collateral. Money360 then matches borrowers with lenders who have been screened for their preferences in a similar manner....sort of like an on-line dating service but for lending.

Once the borrower and lender have been put in touch, money360 steps back and the two parties work out all the details, close it and the lender makes loan servicing arrangements. When the loan closes the lender pays money360 a "marketing fee."

While this service is not meant to compete with traditional lending, especially in the residential market, it does fill a void left by those who are unable to qualify for a traditional loan for whatever reason. Not a bad idea.