Peer-to-peer (P2P) lending

Peer-to-peer lending (P2P) is different to standard business loans. P2P matches private investors looking to invest their money with people who want to borrow it. In theory, compared to banks, P2P pays higher interest to lenders and charges lower rates for borrowers. The stronger your business profile, the lower the interest rate on your loan.

You apply for the loan directly to the P2P provider, even though technically you’re not actually borrowing the money from them but from a collection of private investors (individuals, businesses or institutions) who have signed up via a P2P lending company. On some platforms, these investors can choose the businesses they lend to. On other sites their money is automatically divided between a number of borrowers.

• More accessible route of funding – if you find that with a low credit score, you may be shut out of ‘traditional’ financing options. If financial institutions won’t lend at competitive rates, P2P might be an option.
• Lower rates – due to P2P having lower overhead costs or origination fees, you may find the interest rate to be more competitive.

Usually peer-to-peer lending platforms offer unsecured business loans. This means you don’t need any security and you can set up your loan quickly. P2P is one of the more accessible forms of alternative finance. 

An initial quote will not have an effect on credit score so it pays to shop around to look for the best rate. 

Your business may benefit from competitive, fast and easily processed (48 hours) P2P loan. Borrow from £5,000 to £15m. The term length is usually from 1-5 years. The rates offered are from 6% typically (comparable to other unsecured loans) plus fee of approximately 1% of loan.

You might also want to consider debt crowdfunding – more commonly known as peer-to-peer-lending (P2P) – or other types of equity finance such as angel investors (business angels).

• equity crowdfunding
• business angels
• venture capital
• special situations