Peer-to-peer lending has really taken off in the last few years and has become a £40 billion industry.
The newest of the new. Peer-to-peer Bank Loans for Business have been around for ~5 years. They tend to be very FinTech orientated, with many preferring online journeys. Whilst to the borrower, they seem and appear the same as any normal loan, they are funded by individual and institutional investors, who decide to bid on and fund your business loan based on its risk category.
What is Peer-to-Peer Lending?
P2P loans are relatively new in commercial lending that allows individuals and companies to invest and fund the business loan in return for the interest rate payment. Instead of the bank making a return on your loan, others can now. Think helps you compare Peer-to-Peer Business Loans instantly with our iFunds Technology.
How does Peer-to-Peer lending work?
A Business owner gets the loan arranged via a ‘platform’ that uses different types of checks and technology to underwrite the loan, check eligibility and therefore investors have access to it. Riskier loans are valued at much higher interest rates so the investor gets a potentially higher return for their investment. This can benefit business owners in riskier sectors or with a lower credit scoring.
Once affordability and risk is assessed, your business loan is packaged and is placed (or sold) on a platform at a pre-agreed and fixed interest rate, and the investors (retail and institutional) fund the loan. This stage can take anywhere from 1 day to 45 days, depending on the platform used.
Its a popular new form of lending with new platforms cropping up weekly. Think Business Loans have exclusive access to many of these new platforms, due to our expertise and experience.
There are now over 50 Unsecured peer-to-peer lenders in the market, all favouring different sectors and purposes and all with different acceptance criteria and preferences. Finding the best one for your business is something Think prides itself on. Successfully placing 1000’s of UK businesses with the right lender.