Prosper gets green light to resume lending

US person-to-person loan exchange Prosper announced that regulators have finally given it the green light to resume lending following nine long months out of action.

Last year Prosper was forced to close its doors to new loans in order to register its business with the Securities and Exchange Commission. But in April, after receiving an intra-state exemption from the California Department of Corporations, the firm briefly opened to business again. This meant Californian residents and businesses could make loans, with anyone in the US able to borrow.

Nevertheless, with SEC registration still not completed, it performed a U-turn less than a month later and stopped accepting loans again. And the site will continue to work as before but with the addition of a secondary market, where lenders can buy and sell Prosper loans "notes" to each other. The risk rating system has also been tightened up, with loan listings by individuals needing to meet a minimum credit score requirement of 640.

However, the planned introduction of an Open Market initiative, where vetted finance companies can post loans on Prosper and invite bids, appears to have been put on hold.