Bypass the bank with new peer-to-peer lending scheme for small businesses

Bypass the bank with new peer-to-peer lending scheme for small businesses

Have you heard of peer-to-peer lending?

The practise involves private savers lending money to businesses and projects via an online peer-to-peer lending website – effectively enabling anyone to become a financial broker.

This allows small and medium enterprises (SMEs) to secure funding without going through a traditional financial intermediary, such as a bank or loan company.

Peer-to-peer lending has been around since the mid-1990s, but its popularity has surged in recent years following the 2008 global financial crisis that resulted in banks becoming far more scrupulous with lending, making it harder for businesses to secure loans.

In June, the Glasgow Chamber of Commerce announced […] Read more

Risks, opportunities in China’s growing P2P lending market

In China, online peer-to-peer (P2P) lending has been growing rapidly since around 2010. If the country’s P2P lending industry can successfully control risk while capitalizing on innovation, it should help alleviate chronic funding difficulties of small and midsize enterprises.

Internet finance’s domain in China is expanding into P2P lending and crowdfunding against the backdrop of Yu’E Bao’s widespread popularity.

P2P lenders provide a platform for individuals to lend to and borrow from each other online.

Although an exact count of P2P lenders (platform providers) is unavailable, the People’s Bank of China (PBoC) reported that more than 350 were in existence as of the […] Read more

New Zealand: Crowd funding and peer-to-peer lending

Lucky timing, and a policy commitment to promote innovation in capital markets, are about to put New Zealand among the early adopters in legislating for crowd funding and peer-to-peer lending as a source of fund raising.

The US did it in the Jumpstart Our Business Startups (JOBS) Act, which was passed last year but has yet to come into force. Now our Government has seized the opportunity created by the Financial Markets Conduct Bill (FMCB) to make similar provision here.

What is crowd funding and peer-to-peer lending?

Both are internet based methods of raising money. Crowd funding is typically for small one-off projects […] Read more

Government’s British Business Bank to lend £10m through peer-to-peer lender RateSetter

The British Business Bank, the government-owned financial institution, has announced that it is to lend £10m to businesses owners through peer-to-peer (P2P) funding platform RateSetter.

The deal, which will commence from Monday 21 July, is targeted at supporting the growth of individual entrepreneurs, sole traders and partnerships through RateSetter’s business loans.

The Bank will lend 40% of any qualifying loan on the site until the first £4m has been utilised, and will then move to 20% for the remaining £6m; facilitating a total of £40m in funding.

Launched in October 2010, FCA-regulated RateSetter provides P2P loans directly to the individual rather than the […] Read more

Alternative Funding Network P2P loans

How P2P for Property can Enhance the Market: Insights from Ian Thomas, LendInvest

A few weeks ago, the AFN caught up with Ian Thomas, Co-founder of LendInvest to learn about their model and how property based lending via P2P can enhance the marketplace for borrowers and lenders alike. Be sure to check out the LendInvest Case-study video in July!

Here is what he had to say:

P2P lending will provide a catalyst for change in the mortgage market, P2P lender’s use of technology and big data will enable better risk underwriting and will provide borrowers with a straight forward and transparent application process. […] Read more

Finally banks embrace P2P lending, as Santander gets into bed with Funding Circle

Peer-to-peer (P2P) lenders have been touted as one of the biggest threats to traditional banks, but now they’re getting into bed with them. Santander will be referring small businesses it turns down for loans to P2P platform Funding Circle, who in return will promote the bank’s current accounts and other services. MT can just feel the love.

P2P startups had made a lot of noise about how they were different to banks, who have been notoriously stingy with small business lending since the financial crisis. Indeed, Funding Circle director Ed Wray told MT in February that while P2P lending wouldn’t do […] Read more

Santander Puts It Weight Behind P2P Financing

Santander Puts It Weight Behind P2P Financing

As peer-to-peer financing networks are gaining more ground in Great Britain and the coalition government is pushing legislation that would require banks direct rejected loan applicant to alternative financial services, Santander will be the first high-street bank to officially partner with a P2P service.

Funding Circle, a peer-to-peer lending website that specializes in corporate loans, follows months of negotiation and a move by San Francisco-based Union Bank last week to sell some of its personal loans through the online marketplace Lending Club.

“Santander’s partnership with Funding Circle is a good example of how traditional and alternative finance can work together to help […] Read more

Small Businesses Turn to Alternative Funding for Loans

Small Businesses Turn to Alternative Funding for Loans

People are always looking for ways to invest their money so that they can get a positive return. But when it comes to opportunities, most people tend to stay on the traditional path; putting their money into stocks, bonds, mutual funds, money markets or CD’s. But there are other ways, however, that a person can invest their money for a solid return.

In 2013, peer-to-peer lending is one of the hot investment strategies that Wall Street is starting to take notice of. The reason is that it’s expected that over $2 billion in loans will originate from peer-to-peer lending leader LendingTree […] Read more

UK peer-to-peer lenders eye institutional investors; new crowdfunding products

Ask the CEO of any investment bank for a top-five list of challenges facing the industry in 2014 and competition from peer-to-peer (P2P) lending firms is unlikely to feature. But the next year could be a defining period for a phenomenon also known as crowdfunding.

The ambition of UK-based firms such as Zopa, Ratesetter and Funding Circle is to create an alternative to bank lending as financial institutions have shed assets and cut their balance sheets after the financial crisis. These P2P companies have created a new asset class by opening up the loan market for small and medium-sized companies […] Read more

Loans That Avoid Banks? Maybe Not

Loans That Avoid Banks? Maybe Not

It was that rare thing, scarcely seen in the financial world since the debut of the A.T.M. or microfinancing: an innovation to help regular people. When peer-to-peer, or P2P, lending began in the middle of the last decade, it offered an easy way for people to lend money to each other over the Internet.

On sites like Prosper Marketplace and Lending Club, prospective borrowers could list their requests, often alongside their personal stories, and people with spare cash could decide whether to finance them.

By cutting banks out of the process, borrowers typically got a lower interest rate than they would have […] Read more