With Citi recently deciding to stop buying debt from Prosper, the online lender is cutting its workforce by 28%, shutting its office in Utah and slashing jobs in San Francisco and Phoenix, affecting 171 people, according to Bloomberg.

The firm's CEO, Aaron Vermut, who is reportedly not taking his salary this year, told Bloomberg: "Over the past year we invested for growth, but with the recent tightening of the capital markets we are refocusing on our core consumer loans business and building more resiliency into the company."

Rival OnDeck Capital is having similar problems. This week it reported that first quarter losses have more than doubled to $13.14 million, sending its stock price plummeting by a third.

The poor numbers are related to an inability to sell off the loans it makes to third parties. In Q1, just 26% of loans were sold to investors, down from 40% in the previous quarter, while the price received for loans also fell.

Meanwhile, another player, SoFi, is trying to address the problem of offloading loans by offering institutional investors equity. According to the Financial Times, for its new funding round - which could hit $1 billion - SoFi is turning away from venture firms and towards insurers, pension funds and sovereign wealth funds.

This would help the company build more strategic relationships, ensuring buyers for its loans as it looks to move out of its traditional stronghold of student debt and into mortgages and personal loans.

Next up is Lending Club, which reports first quarter results next week. The firm has seen its share price fall by more than a third so far this year, taking another hit this week as news of its rivals' travails made the news. Last month it said that it would raise rates on loans in an effort to attract investors - the third time it has done this in six months.