Zopa is a safer bet for lenders, as the credit unions certify the loans will be repaid.

FORBES: Banking 2.0: New Capital Connections For Entrepreneurs

Zopa, Funding Circle and their ilk are regulated by the Office of Fair Trading as lenders or credit providers.

BBC: What threat to banks from internet lenders?

The four sites--GlobeFunder, Lending Club, Zopa and Prosper--each estimate that approximately 20% of the loans they handle are for businesses.

FORBES: Banking 2.0: New Capital Connections For Entrepreneurs

Here's what matters: when those borrowers can't pay up, it is you as the lender who takes the loss, not Zopa.

BBC: What threat to banks from internet lenders?

You are actually lending to the individuals who have registered with Zopa.

BBC: What threat to banks from internet lenders?

The interest rates at Zopa max out at 4.25%, which is slightly higher than most checking or money market accounts at major banks.

FORBES: Banking 2.0: New Capital Connections For Entrepreneurs

Zopa categorizes borrowers based on their credit grades and lenders can offer terms and amount of money based on the category of the borrower.

FORBES: Debt Crowdfunders: The Best Of The Best

Zopa categorizes borrowers based on their credit grades, so lenders can offer terms and amounts of money based on the category of the borrower.

FORBES: Crowdfunding In Europe: The Top 10 'Peer-to-Peer' Lenders

Prosper, Zopa and Lending Club all have mechanisms to transfer money between strangers and employ social networking functions that allow borrowers to tell the story of their need for capital.

FORBES: Banking 2.0: New Capital Connections For Entrepreneurs

These sites, with names like Prosper.com, Zopa, Lending Club and GlobeFunder, use social networking tools and other software to simplify the borrowing and lending of capital between strangers and even family and friends.

FORBES: Banking 2.0: New Capital Connections For Entrepreneurs

If you place your money with a peer-to-peer lender like Zopa, you are not lending to Zopa, in the way that you are lending to Barclays if you put your money on deposit with Barclays.

BBC: What threat to banks from internet lenders?

Zopa.com used the auction model in the United Kingdom, but in the United States where it launched in December, it works directly with credit unions and lets these unions set the interest rate and decide whether to fund.

FORBES: Banking 2.0: New Capital Connections For Entrepreneurs

Zopa's business as a lending and borrowing exchange is quite new and does not fall under any of the existing regulatory categories, and as a result the FSA would need an act of parliament to create a new one.

BBC: What threat to banks from internet lenders?

The important point is that businesses like Zopa and Funding Circle do everything that banks do, except that all the credit risk (the risk that the borrower can't repay) and all the liquidity risk (the risk that you as lender won't be able to get your cash when you need it) is with the lender - not with Zopa or Funding Circle.

BBC: What threat to banks from internet lenders?