Add one more company to the list of recent launches: Loanio went live today after a lengthy "coming soon" process (previous coverage here). The thousands of people on its email list received a message this morning announcing the launch (see below). 

Founder Michael Solomon demo'd the product back in April at our Finovate Startup event (video here). Today's live version looks similar to the April build. The key differentiating features of Loanio's product are:

• Ability for anyone to borrow, if they have a creditworthy co-borrower
• Optional enhanced pre-verification process (costs $35 for single borrower, $45 for co-borrower apps) allows borrows to boost their credibility by submitting the following documentation in advance of posting their listing:
  - Photo ID
  - Income documentation
  - Bank account statement
  - Employment documentation
  - Postal address documentation
• Longer loan terms -- up to 5 years compared to P2P lending standard of 36 months
• Borrowers have the option of accepting partial funding of their loan request as long as it's at least 35% funded

Several other tidbits from the FAQs:

• Experian provides the credit info on borrowers
• Lenders pay a 1% service fee on all outstanding loans
• Buyers pay an origination fee as follows, equal to the greater of $95 or:
  -- Loans with one borrower: 2% for A and B credit grades, 3% for all others
  -- Loans with co-borrower: 3% for A, B and 4% for all others
• Borrowers may seek loans of $1,000 to $25,000
• Lenders must put in at least $100 to participate with a minimum bid amount of $50

The first borrower listing appeared on the site within the last hour or so, a C-grade credit seeking $2800 for debt consolidation (see screenshot below, note 1).

Screenshot of Loanio home page with first loan listing (1 Oct 2008)

State coverage limited
At launch, Loanio has gathered licenses to lend in only 22 states (see note 2). However, 10 of those have interest rate caps of 12% or less, so lending will be limited to the highly credit worthy, and one (Minnesota) caps the loan amount at $2550.  Here are the 12 states which Loanio primarily competes in today:

State	Max Interest Rate
Alabama	30%
Georgia	30%
Mississippi	30%
New Mexico	30%
North Carolina	30%
Indiana	21%
West Virginia	18%
Wisconsin	18%
Alaska	16%
Nebraska	16%
New Jersey	16%
New York	16%

These are the 10 states that allow borrowing from Loanio but cap the rate so that only those with excellent credit are likely to receive funding:

State	Max Interest Rate
Tennessee	12.25%
Hawaii	12%
Louisiana	12%
South Carolina	12%
Virginia	12%
Connecticut	12%
Arkansas	11.25%
Delaware	11.25%
Kentucky	10.25%
Pennsylvania	6%
Washington D.C.	6%

As you can see, there is no lending in major population centers of California, Texas, Florida, Illinois, Ohio, Massachusetts and for the most part in Pennsylvania with a 6% rate cap. But there are ways to change that and Loanio can at least get started in 10 states while it fine tunes its business and develops methods for lending in all 50 states. Prosper and Lending Club both originate loans nationally through Webbank before passing them to the individual lenders. This allows nearly full geographic coverage, while usually bypassing state-mandated maximum loan rates.

Loanio joins Prosper, Lending Club, GlobeFunder, Fynanz, GreenNote and Virgin Money in the U.S. P2P lending space (currently, only Prosper, Fynanz, and now Loanio, operate true P2P exchanges). The others are either closed to individual lenders temporarily (Lending Club, GlobeFunder) or require borrowers to find their own funds from friends and family (GreenNote, Virgin Money). For a complete look at the market, see our Online Banking Report on Person-to-Person Lending.

Email: Loanio now open (received 10:39 AM Pacific time 1 Oct 2008)

Note:
1. Unfortunately, this loan is unlikely to be funded due to the max interest rate of 6%, likely because she is a Pennsylvania or Washington DC resident where the rates are capped at 6% (see table).
2. Just about anyone 18 or older can be a lender regardless of where they live. Only South Dakota and Pennsylvania residents are currently ineligible to lend through Loanio.