What is Peer-to-Peer Lending?
Peer-to-peer lending (or P2P lending) gives more established businesses the opportunity to raise funding from private investors, providing an alternative method to traditional bank lending.
Funding is provided as a loan – or multiple loans depending on the sum required – to help businesses secure the finance required to fulfil a wide range of business purposes, for example to purchase new machinery, buy new stock or fund a new order.
Investors effectively bid for your custom through an auction, often on peer-to-peer lending sites. They cite the sum they’re prepared to offer and quote their required interest on the loan. As bidding intensifies investors will commonly drive the interest rates down – often below those offered by traditional lenders – leaving you with a choice of partners to work with.