The name 'Wiki' may seem an odd fit for a financial company these days, but a new peer-to-peer loan company, WikiLoan Inc., hopes to make it work.

WikiLoan, which unveiled its service Friday, seeks to capitalize on the expected growth of alternative lending products and social networking by formalizing loans between friends and family members for a fee.

Its model is one take on the peer-to-peer lending concept that has evolved over the years as companies like Prosper Marketplace Inc. and Lending Club Corp. have strived to find their place in the financial services world.

But WikiLoan aims for a different market than Prosper and Lending Club. Unlike those P-to-P pioneers, WikiLoan doesn't tout itself as a matching service for borrowers and investors. And it isn't an investment vehicle for consumers looking to make a little money by lending to strangers in need of cash.

With the WikiLoan model, borrowers find the lenders themselves and the company helps them with the documentation and automates the exchange.

"We're just a platform that offers a service for people to come together for private loans," said co-founder and president Ted DeFeudis. "We didn't want to go down the same road as Prosper and Lending Club, because there is not enough money in it, frankly."

Consumers in search of a loan can go to the WikiLoan site to create an application. They enter the amount they need (anywhere from $500 to $25,000) and their desired interest rate. Then they can shop the loan request around by e-mailing it to friends and relatives or by posting the request on social networking sites operated by Facebook Inc., News Corp.'s Myspace and Twitter Inc.

Leveraging social media is a tactic that has been tried before.

Lending Club, of Redwood City, Calif., started out offering its service solely through Facebook. But Lending Club quickly moved the service to its own website to open it up to more consumers.

Rob Garcia, the senior director of product strategy at Lending Club, said his company discovered that Facebook was not a good place to recruit borrowers, since many did not come to the site to seek loans. Lenders, however, are more open to boasting online about their successful investments, Garcia said.

WikiLoan's model might be a better fit for Facebook, because for borrowers, "you're already making a decision offline to tell your friends and family that you do want to borrow money," Garcia said. "So it's very different from Lending Club's concept because Lending Club's concept is anonymous."

Once a lender accepts a borrower's request, WikiLoan can handle all of the paperwork, including the promissory note, and can set up automatic payments. WikiLoan charges borrowers a flat $49 application fee, and lenders pay one-twelfth of 1% per month of the outstanding principal balance for WikiLoan to handle the administration of the loan.

The lender's money is held in escrow at Bank of America Corp. After a loan closes, WikiLoan transfers the money directly to the borrower, who makes monthly payments into the lender's account.

Based in Los Angeles, WikiLoan is run by DeFeudis, a former financial adviser for Merrill Lynch & Co. and Oppenheimer Securities; and by Marco Garibaldi, a computer programmer and serial entrepreneur. According to the Internet Movie Database, Garibaldi also has a background in the entertainment industry, having directed a handful of "Mighty Morphin Power Rangers" episodes.

The company has gone through several iterations (none of which dealt with peer-to-peer lending) since the late 1980s. DeFeudis bought the defunct public company in 2005 and relaunched it as Swap-a-Debt Inc. in January 2008 with the idea of building a peer-to-peer lending company. He and Garibaldi have spent the last two years working out the legal and regulatory issues, and building the technology platform, and have since changed the company's name to WikiLoan Inc.

WikiLoan is of no relation to WikiLeaks, which has become a pariah to payments providers after exposing confidential government documents.

"Wiki means quick in Hawaiian. That's where the whole thing originated, and it became meaningful in the Web 2.0 world," DeFeudis said. "It's an online community that is participating and collaborating in an online process, so it actually makes sense for us."

WikiLoan also sells phone cards, known as WikiCash cards, through a partnership with SDI Distributors NJ Inc. The cards are sold in more than 20,000 retail locations nationwide. DeFeudis envisions his company eventually expanding into other financial products, and taking its platform global.

According to its latest quarterly filing with the Securities and Exchange Commission, WikiLoan has had no significant revenue or assets since 2005, and as of July 31 it had accumulated losses of $5.9 million. Given these conditions, WikiLoan said it needs to raise significant capital in the near future to continue operating.

Analysts say the company has the right idea in using social media to help consumers get loans.

"The confluence of peer-to-peer lending and social media … is a strategic marketing play," said John Ulzheimer, president of consumer education at

Mark Schwanhausser, a senior analyst at Javelin Strategy and Research in Pleasanton, Calif., agreed, saying, "Certainly social networks are promising. … There's just been astounding growth in the number of people who are trying it."

However, it still may be too soon for consumers to combine their use of social networks and banking, he said.

"There is a disconnect," Schwanhausser said. "That's not where consumers' heads are at the moment. It's not a slam-dunk, going-to-pay-off-in-2011 kind of concept."