Filed Pursuant to Rule 424(b)(3)Registration Statement No. 333-147019$500,000,000 Borrower Payment Dependent Notes
This is a public offering to lender members of Prosper Marketplace, Inc., or Prosper, of up to $500,000,000 in principal amount of Borrower Payment Dependent Notes, or “Notes.”We will issue the Notes in a series, with each series of Notes dependent for payment on payments we receive on a specificborrower loan described in a listing posted on our peer-to-peer online credit auction platform, which we refer to as our “platform.” Alllistings on our platform are posted by individual consumer borrower members of Prosper requesting individual consumer loans, whichwe refer to as “borrower loans.”Important terms of the Notes include the following, each of which is described in detail in this prospectus:
Our obligation to make payments on a Note will be limited to an amount equal to the lender member’s pro rata share of amounts we receive with respect to the corresponding borrower loan for that Note, net of any servicing fees. We donot guarantee payment of the Notes or the corresponding borrower loans.
The Notes are special, limited obligations of Prosper only and are not obligations of the borrowers under thecorresponding borrower loans.
The Notes will bear interest from the date of issuance, have a fixed rate, be payable monthly and have an initialmaturity of three years from issuance, which we may change from time to time.
A lender member’s recourse will be extremely limited in the event that borrower information is inaccurate for anyreason.We will offer Notes to our lender members at 100% of their principal amount. The Notes will be offered only through ourwebsite, and there will be no underwriters or underwriting discounts.The Notes will be issued in electronic form only and will not be listed on any securities exchange. The Notes will not betransferable except through the Folio Investing Note Trader platform, or the “Note Trader Platform,” operated and maintained byFOLIO
Investments, Inc., a registered broker-dealer. There can be no assurance, however, that a market for Notes will develop onthe Note Trader platform. Therefore, lender members must be prepared to hold their Notes to maturity.
This offering is highly speculative and the Notes involve a high degree of risk. Investing in the Notes should be consideredonly by persons who can afford the loss of their entire investment. See “Risk Factors” on page 17.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminaloffense.
The date of this prospectus is July 13, 2009