All types of businesses need funds at a certain point of their development, but not all types of businesses are creditworthy enough for traditional lending institutions. Happily, investors on the P2P lending market fancy investing in original and dynamic entrepreneurial projects. Depending on the chosen platform, the loan can go from $100k up to $5 million.
How does it work on the P2P lending market?
Once a funding request is placed on a chosen P2P platform, it gets quoted accordingly to the amount of risk it represents for a potential investor. The quotation defines the rate at which the funding will be provided. If the company accepts the financial terms, it should provide the platform with the proofs of its creditworthiness to get an approval. As soon as the loan gets approved, the project is placed 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 be at least 2 years old, have a minimum level of annual sales and a at least one profitable year.
What can you get a business loan for?
A business may need a loan for all types of reasons. Through P2P lending you can fund: new equipment, a new location or office space, marketing needs, new hires 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.