Peer-to-Peer Business Lending: Who’s Up For It?

Peer-to-Peer Business Lending: Who’s Up For It?

According to crowdfunding and peer lending platform Funding Tree, peer-to-peer lending (or P2P) is set to become a £40 billion industry this year – and peer loans for business are an increasingly popular alternative to traditional business loans from banks.

The funds behind peer-to-peer business loans come from individuals or organisations who ‘invest’ their own money, so that it can then be lent to businesses. Usually, this happens via an online platform, sometimes using a crowdfunding model – and new P2P (or ‘P2B’) platforms are springing up apace.

Not all platforms lend to businesses, concentrating instead on loans to individuals. But below is a selection of those that do:

Funding Circle

Funding Circle was launched in 2010 and claims to be “the UK’s biggest peer-to-peer business lender.”

·         Loan amount: £5,000 to £1m

·         Loan term: 6 months to 5 years

·         Application time:  “As little as 20 minutes.”

·         Response time: within 48 hours. Funds are normally available within a week.

·         Amount Lent So Far: £1.1bn

ThinCats

ThinCats launched in early 2011 and provides peer-to-peer secured business loans. It “links experienced investors with established business borrowers to provide a serious alternative to high street banks” and only chooses “high quality, low risk lending opportunities.”

·         Loan amount: £100,000 to £3m

·         Loan term: 6 months to 5 years

·         Application time: As long as it takes to formulate an email that includes your company name and registration number, a brief description of your business, how much you are looking to borrow, what the loan is required for, your company website URL and the contact details of the principal borrower.

·         Response time: Potential borrowers are only accepted if they have the support of a Sponsor “willing to put their reputation on the line.” The Sponsor must review the borrower’s bank account, the security available and the borrower’s ability to repay before writing a report similar to one a bank might produce before deciding to grant a loan. This process usually takes three or four meetings.

Amount Lent So Far: £155,881,000

Funding Tree

Launched in 2014, Funding Tree claims to be “the only online platform that has been designed to help at every stage of a business life cycle.”

·         Loan amount: £10,000 to £100,000 unsecured; £100,000 to £1m secured

·         Loan term: 6 months to 5 years

·         Application time: 15 minutes to create your ‘pitch’

·         Response time: Unclear

·        Amount Lent So Far: Unknown

Assetz Capital

Launched in 2013, Assetz recently claimed to be the “fastest growing peer-to-peer lender in the world.”

·         Loan amount: £50,000 to £2m, depending on security type

·         Loan term: Flexible

·         Application time: Unknown

·         Response time: A Fast Offer letter can be produced “within five days of the application pack and due diligence being completed”, and you may be able to get a “decision in principle” within 24 hours, based on the initial details you provide.

·         Amount Lent So Far:  £80 million

The Rebuilding Society

Launched in 2012, The Rebuilding Society claims it’s “passionate about providing access to funding for UK SMEs.”

·         Loan amount: £25,000 to £300,000

·         Loan term: 6 months to 5 years

·         Application time: ‘within 15 minutes’

·         Response time: Most decisions are made within a week, and funds are usually available within 2-3 weeks.

·         Amount Lent So Far: £9.3m

FundingKnight

Launched in 2012, Funding Knight describes itself as “an established crowdlender, blending modern finance with traditional values.”

Loan amount: £25,000 to £1 million

Loan term: 6 months to 5 years

Application time: An online application will be responded to within one working day and followed up with a telephone interview.

Response time: Average time from the initial application to delivery of funds to your bank account is 1 month, but if your paperwork is well-prepared, it may be faster.

Amount Lent So Far: Unknown

Each platform varies in the amount and type of security they require and the rigour of the vetting and approval process. There are also different interest rates, terms and conditions to consider. If you’re interested in this kind of funding, ensure you investigate your options thoroughly and as ever, keep an eye on the small print so that you know exactly what’s expected of you and your lender.

Kara Copple
An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

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