Every company needs funding at a certain point of its development, but not all types of companies are creditworthy enough for traditional lending organizations. Happily, investors on the P2P lending market are looking to invest in original and dynamic entrepreneurial projects. Depending on the chosen platform, a company can borrow from £100k up to £5 million.
How does it work on the P2P lending market?
Once a company owner puts a funding request on a P2P platform of their choosing, it gets quoted accordingly to the amount of risk it represents for a potential investor. The quotation defines the rate at which the project will be funded. After accepting the rate and other terms, the company has to provide the platform with proofs of its creditworthiness to get an approval. As soon as the loan gets approved, the project is put on line on the platform to get funded by individual or institutional investors.
What are the requirements to get a business loan?
Usually, the business should exist at least for 2 years, have a minimum level of annual sales and no less than one profitable year to its credit.
What can you get a business loan for?
A business may need funds for all types of reasons. Through P2P lending you can finance: new equipment, a new location or office space, marketing needs, HR needs or inventory. But you can also refinance, consolidate a debt or get some working capital.
If you own a small business, you probably know how complicated it is to get a business loan through traditional circuits. Through peer to peer lending however, some barrier to entry are suppressed. First of all, the requirements are lower investors being open to risk taking, and so securing a loan is easier, faster and cheaper. The process being entirely on line and very user friendly, it takes not more than 20 minutes to register on the platform, approximatively 48 hours to get accepted, and up to 3 weeks to receive the money. The interest rates are lower and usually no hidden fees added. Moreover, the online investors are welcoming for new borrowers as they are rather eager to support business owners, often locally.
CompareLend.com offers business owners a free, unbiased and immediate access to investors on peer-to-peer platforms. It helps business owners to choose the best financing opportunity from what the market has to offer. Getting financed is then easier, cheaper and faster.