Small business, marketing, data lists
Dec 2016 | Small Business

What is peer to peer lending?

Also referred to as P2P lending, peer to peer lending is where you can use an intermediary company to match you with lenders for your business. It is a relatively new form of lending but has risen in popularity over the last ten years both due to the increased borrowing options it provides businesses but also due to the advantages it offers investors in terms of higher interest rates than more traditional savings accounts.

Peer to peer lending sites

If you’re considering peer to peer lending as an option for your business, then you’ll want to compare some of the main platforms that offer this service in the UK. Here are a few to get your started…

Borrow from £1k – £25k
Loans available over 1,2,3,4 or 5 years
No early repayment fees

Funding Circle
Borrow from £5k – £1m
Loans available over 6 months to 5 years
No early repayment fees

Borrow from £25 – £2m (anything under £25k classed as a personal loan)
Loans available from 3 months to 5 years
No early repayment fees

Peer to peer borrowing with bad credit

P2P lending sites must ensure that those deciding to invest are as protected as possible. For that reason, if you have a poor Business Credit Score, the chances are, you may be refused a peer to peer loan. Experian is here to help though! Firstly, if you haven’t already done so, make sure that you check your Business Credit Score. Head to My Business Profile and we’ll tell you what to do next. We’ll also offer support in improving your score if it’s lower than you hoped.

Is peer to peer lending a good idea?

As a lender, there are a number of risks to consider before entering the P2P lending arena. However, as a borrower, there are no real differences to consider from more traditional forms of borrowing.

As with all borrowing, you should consider if you can afford the monthly payments, whether you really need to borrow and what different interest rates are on offer to you. It’s worth comparing P2P rates with more traditional rates. Generally, they will be lower but this might not always be the case so do your homework before making a commitment.