So far it's the early adopters who are putting their nest eggs into online lending marketplaces. These likely are also buy-and-hold investors — either by choice or necessity — since cashing out of these investments early can be tricky.

Lending Club and Prosper Marketplace run secondary market platforms, but those forums lack sufficient liquidity to make it easy for individual investors to sell their loans, according to industry observers.

"There is liquidity. It's just that it comes at a small price," said Brendan Ross, president of Direct Lending Investments, an institutional investor in peer-to-peer loans based in Los Angeles.

However, a Seattle firm, LendingRobot, is trying to make it simpler and less time-consuming for retail investors to exit their investments. The company will automatically list and price loans on the secondary market. If they still do not sell, they will be repriced until they do.

[Coming this November: Marketplace Lending + Investing. Hear how participants in this fast-growth niche are using data and technology to propel lending into the 21st century.]

The service is currently only available for Lending Club loans. And it comes at a price — LendingRobot charges investors 0.45% per year of the total assets under management, after the first $5,000. But Chief Executive Emmanuel Marot argues that the service will open up marketplace lending to retail investors who demand greater flexibility than is available today.

"Right now, marketplace lending is only long-term," Marot said. "About 90% of our clients today, they started investing on Lending Club and Prosper knowing that they could not get their money out easily."

He added that newer investors often expect to be able to access their money in less than three years, which is the shortest loan term that Lending Club offers.

While observers agree that the secondary market for peer-to-peer loans is relatively illiquid, it is unclear whether that has been a significant factor in the industry's recent shift toward a heavier reliance on institutional investors. Marot estimated that only about 25% of the money in the industry today belongs to individual investors.

The arrival of well-heeled hedge funds and other institutional investors have allowed lending marketplaces to grow quickly. At the same time, some individual investors have expressed concern that the most attractive loans are being snatched up so quickly that retail investors do not have a fair shot.

The emergence of a more liquid secondary market would help to build the retail side of the peer-to-peer lending business, said Steven Wallman, chief executive officer of FOLIOfn, Inc., which runs the secondary trading platforms for both Lending Club and Prosper.

He said that many potential investors want to know, "If I need the money, how do I get out?"

"And clearly a more robust secondary market would answer that question more," Wallman added.

Liquidity in the secondary market for peer-to-peer loans has been improving, according to Wallman, though he declined to provide data. "I think that as the primary market expands, there becomes increasing interest in the secondary market," he said.

Direct Lending's Ross said that more liquidity in the secondary market would facilitate the emergence of mutual funds that focus on peer-to-peer loans and are sold to retail investors, since fund managers would have an easier time managing their funds.

No U.S.-based P-to-P mutual funds exist today, though Prosper President Ron Suber said recently that he expects two of them to open in the third quarter.

"The thing that will push this whole industry into a true retail market will be liquidity in the secondary market," Ross said.

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