ORLANDO, Fla. — Turned away and turned off by conventional banks, Jerry R. Brown plugged into an online lending network in search of a financial boost for his business.

The result: a $10,000 loan at an interest rate of 15.4 percent.

"It might seem high, but not really, not for a small business these days in this economy," the St. Cloud, Fla., gun-shop owner said. "It's way below what you'd pay for a cash advance on a credit card. I was extremely happy."

Brown is among thousands of Americans surfing the latest wave in Internet commerce: peer-to-peer banking, a grass-roots-type phenomenon that matches borrowers and lenders in an online-auction format.

Web-based lending "communities," managed by companies such as Prosper Marketplace Inc. (prosper.com) of San Francisco and London-based Zopa Ltd. (zopa.com), have taken a page from eBay, the popular online-auction service. Instead of merchandise, the "commodities" up for bid are loans and interest rates.

Some of the lending occurs within informal groups of like-minded people — there's a Tampa, Fla.-based "Gator Pride" for University of Florida alumni and an Orlando-based group of Seventh-day Adventists, for example. But group membership is not required.

More than 50,000 people have surfed prosper.com each month since its debut in February, according to estimates by Compete Inc., a Boston-based company that studies consumers' online behavior.

You won't find easy money on the site: So far, more than 26,000 loan applications have resulted in about 2,200 loans, with total borrowing of $10.2 million, according to Savagenumber.com, an online research site. Interest rates have ranged from 9 percent to nearly 24 percent.

Most of those seeking loans on the site are high-risk borrowers, though Prosper runs credit checks on applicants and assigns them one of eight grades, from AA down to HR ("high risk") and NC ("no credit history").

Some experts consider peer-to-peer financing on the Internet too risky for both lenders and borrowers, especially given the growing number of Internet security breaches in the news and the Web's role in identity theft and related fraud. They foresee problems with a system in which complete strangers put their personal financial information on the Internet and arrange loans with one another for thousands or tens of thousands of dollars.

The system has worked well so far for one Orlando lender, Lisa Piecora, a Prosper client who has invested $6,500 in a portfolio of 70 loans.

The former schoolteacher, now a real-estate investor, said she likes the system's grass-roots nature and the opportunity it affords to earn above-average returns on her money. Her loan portfolio, which started generating payments in May, is earning an average return of 10 percent.

"You have to go into this knowing there is no guaranteed safety here — these are unsecured loans, this is risk capital and you could lose it all," Piecora said. "You also have to realize that sometimes these stories borrowers are writing on the site (to justify their loan requests) are just a bunch of baloney.

"But there are some people who really need to borrow money, and this is a new way of doing it outside the traditional arena. It is very exciting and has a lot of potential."

Prosper officials say concerns about its online operation are uninformed. The network is an open but orderly system of commerce, not a Wild West of Internet fraud, they say.

Prosper protects users' privacy, verifies all financial data, manages the loan payments, handles defaults and collections, and monitors customers' behavior, said Chris Larsen, its chief executive officer, who also founded E-Loan Inc., the successful online loan brokerage. The company is also subject to all federal and state regulations pertaining to consumer-finance businesses, he said.

Prosper's network already has more than 1,150 registered affinity groups. All were created by individuals betting that such affinities would produce better loan deals.

Conventional lenders are, not surprisingly, critical of the peer-to-peer approach.

"There has always been a demand for this type of very risky fringe lending," said Tracy Mills, spokeswoman for the American Bankers Association. "It can provide a quick fix but doesn't really address a person's underlying need to establish good financial relationships.

"There are a lot of unknowns and risks — and not a lot of protections like those you would have with traditional investment products."

Still, for adventurous investors such as Piecora, peer-to-peer banking has a personal, even philosophical, appeal that mainstream financial institutions lack. One of her borrowers has already defaulted on a loan, yet the Orlando woman remains a believer in the approach.