Peer-to-Peer Lending

/Peer-to-Peer Lending


Peer-to-peer lending, sometimes abbreviated P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders directly with borrowers. Since the peer-to-peer lending companies offering these services operate entirely online, they can run with lower overhead and provide the service more cheaply than traditional financial institutions. As a result, lenders often earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates, even after the P2P lending company has taken a fee for providing the match-making platform and credit checking the borrower. We only assist businesses in sourcing funding with a suitable P2P platform.

The interest rates can be set by lenders who compete for the lowest rate on the reverse auction model or fixed by the intermediary company on the basis of an analysis of the borrower’s credit. The lender’s investment in the loan is not normally protected by any government guarantee. On some services, lenders mitigate the risk of bad debt by choosing which borrowers to lend to, and mitigate total risk by diversifying their investments among different borrowers. Other models involve the P2P lending company maintaining a separate, ring-fenced fund, which pays lenders back in the event the borrower defaults.

Why Use Peer to Peer Lending?

  • We provide SMEs access to many different lending platforms, selecting the right one for the business. This may be based upon the type of lend, the security on offer, the size of the facility or the complexity of the deal. We assist in the proposal process and put assist with any required business plans and information required to obtain funding.
  • We undertake preliminary assessments ready to ensure a smooth and speedy listing on the Peer to Peer Lending platform.
  • Remove the lengthy delays often seen when dealing with Banks
  • Reduce complicated and unnecessary covenants and conditions
  • With the correct information it is possible to obtain funding in days rather than some institutions who can take months to process applications.
  • You can borrow from £25k to £5M over periods up to 10 years with limited or no redemption penalties for early repayment.
  • It’s suitable for businesses in all industry sectors, from property to finance to health care.

Types of Peer to Peer Lending

Secured against fixed assets of the business, secured lending is often used for a larger amount and over longer repayment periods. Used for reasons similar to unsecured loans, borrowers have normally been trading longer, are better established with fixed assets on the balance sheet, and are able to attract a lower borrowing rate. These assets, normally in the form of property, equipment, or vehicles, will be called upon in the case of default.

Typical repayment periods are 36-60 months.

Selective or Single Invoice Finance is a solution designed to provide businesses with immediate access to capital on an invoice by invoice basis, without the burden of a long term contract. With Peer Funding, all invoices are verified and, for your security, full assignment of the debt is taken. It offers businesses quick and straightforward access to short term funds with flexible terms.

Typical repayment periods are 30/60/90/120 days.

A cash flow finance facility similar to Selective Invoice Finance, but rather than financing each individual invoice this facility allows for batches or multiple invoices from the same debtor. Invoices are verified by Peer Funding and full assignment of debts are taken.

Typical repayment periods are 30/60/90/120 days.

A short-term bridging product secured against commercial or non-residential property. Used to ‘bridge’ a gap by offering short-term access to funds in the period between the purchase of a new and the sale of an existing property or a main line of credit becoming available..

Loans are repaid in a single repayment of capital and interest at the end of the loan term. In the case of default, the property itself will be called upon to recoup any potential investor losses.

Typical repayment periods are 6-18 months.

Term loans for building and property development companies, with a loan to value maximum of 70% to include interest and capital, usually secured by way of a first charge against the property. Loans are repaid in a single repayment of capital and interest at the end of the loan term. In the case of default, the property itself will be called upon to recoup any potential investor losses.

Typical repayment periods are 6-18 months.