Small Business Loans

A Peer-to-Peer (P2P) lending is the practice of lending money to businesses or individuals through online services that match lenders directly to borrowers. It involves borrowing money without going through a conventional lender such as a bank or financial institution. The money comes from investors who can be individuals or companies. Especially for small business loans, P2P lending a good way to get better returns as an investor or a lower interest rate as a borrower.

Here are some of the online platforms that provide best business loans and P2P lending services:
1

Credible

Credible is the multi-place market lender that allows borrowers to receive competitive loan offers from its vetted partners.

By: Credible Labs Inc. From USA
Based on 14 Votes
2

PROSPER

Prosper is a marketplace that provides person-to-person lending utilizing a listing and bidding process to get competitive rates for loans.

By: Prosper Funding LLC From USA
Based on 1 Vote
3

Lending Club

Lending Club is the online credit marketplace, facilitating business loans, personal loans, and financing for elective medical procedures.

By: LendingClub Corporation From USA
4

SoFi

Sofi is a modern finance company that offers low rates for student loan refinancing, mortgages, and personal loans.

By: Social Finance, Inc. From USA
Based on 1 Vote
5

Avant

Avant is a platform that offers access to personal loans at competitive interest rates with a quick and transparent process that is entirely online.

By: Avant, Inc. From USA
6

Mintos

Mintos is a peer-to-peer lending marketplace that connects investors with borrowers of various loan originators.

By: Mintos Marketplace, AS From Latvia
7

Earnest

Earnest is a technology-enabled lender that rewards financially responsible people with better interest rates.

By: Earnest Operations LLC From USA
8

UpStart

Upstart is an online lending platform that finances people based on signals of their potential including work history, academic performance, the area of study, etc.

By: Upstart Network, Inc. From USA
Based on 2 Votes
9

Zopa

Zopa is a peer-to-peer lending service. They offer borrowers competitive low rate...

By: Zopa Limited From UK
10

Funding Circle

Funding Circle is an online marketplace lender focused on lending to small businesses.

By: Funding Circle Limited From USA
11

OnDeck

Ondeck is a technology-enabled financial platform that provides loan financing to small and medium-sized businesses.

By: On Deck Capital, Inc. From USA
Based on 1 Vote
12

Fundbox

Fundbox is a technology company that helps small business owners and freelancers overcome short-term cash flow gaps by advancing payments for their outstanding invoices.

By: Fundbox ltd From USA
Based on 3 Votes
13

Iwoca

Iwoca is a finance provider for small business across the UK.

By: iwoca Ltd From UK
14

Fundation

Fundation is an online direct lender offering simple interest small business loans to companies through a technology-driven process.

By: Fundation Group LLC From USA
15

SpringLeaf

Springleaf Finance Inc., through its subsidiary companies (Springleaf), is a provider of consumer credit.

By: Springleaf Finance, Inc. From USA
16

Peerform

Peerform is a peer-to-peer lending platform by offering personal loans directly by cutting the middle man.

By: Peerform, Inc. From USA
17

Lending Work

Lending Work is a peer-to-peer lending platform that matches shrewd lenders with creditworthy with personal loan borrowers.

By: Lending Works Limited From UK
18

Smartbiz

Smartbiz is an online marketplace for fast, affordable SBA (Small Business Administration) loans for small business owners who want to grow their business.It leverages advanced technology to dramatically speed up the SBA loan process.

By: SmartBiz Loans, LLC. From USA
19

Kabbage

Kabbage is an online platform for merchants to borrow working capital.

By: Kabbage Inc. From USA
20

CAN Capital

CAN Capital provides capital to small and medium-sized businesses, using its own real-time platform and risk-scoring models.

By: CAN Capital, Inc. From USA
21

MarketInvoice

MarketInvoice is peer-to-peer invoice finance platform. It is simple and easy to...

By: MarketInvoice Limited From UK
22

BlueVine

BlueVine is an online provider of working capital financing to small businesses.

By: Bluevine Capital Inc. From USA
23

IOU Financial

IOU Financial is an online lender that provides working capital to small businesses.

By: IOU Financial Inc From USA
24

Ezbob

Ezbob is a financial provider that offers an instant, innovative online financing solution for all the UK businesses to grow.

By: EZBob Ltd From UK
25

GoKapital

Gokapital provides various Business funding including equipment lending, cash advances, business loans and unsecured term loans.

By: GoKapital, Inc. From USA

When setting up a business, most entrepreneurs invest their lifetime savings in the hope that success will bring back greater returns than investments. This courage is what defines an entrepreneur, but what matters more is how they go through hard times that come in case their small business collapses due to some reason. In order to support such businesses, the services for small business loans exist. They provide the organization with funds in wet times when everyone else pulls back their hands so that entrepreneurs get one more chance to stand up and build their empire as they have always wanted to.

Small Business Loans can be obtained from either from the loan agencies or lending platforms. Both of them have their own set of terms and conditions to sanction the loans to organizations in need, and they also maintain a log of organizations that pay back timely and the ones that don’t. This helps them form their credit score based on history so that they know who to lend the amount next time. We’re going to state in brief how both of these work under the terms - FinTech companies and Lending platforms.

Fintech companies

Fintech companies are organizations that are funded by the collaboration of several multinational banks and serve business funding needs over a good part of the globe. And as they serve to businesses spread across multiple areas of the world, they have their own PPP (Purchasing Power Parity) conversion rates as well. This allows them to work swiftly for every business and provide the owners with a sigh of relief. These companies offer loans after the users provide them with valid proof of their business accounts and sales revenue. They check all the documents and collections thoroughly (the process takes very less time), and the businesses that pass through the check are granted a credit of up to $250,000 immediately.

Users can withdraw the amount as needed and invest in recruiting, stocking, and other operations necessary to start the business once more. And how are these loans processed? Well, the Fintech platforms we just mentioned have their own platform from where users can request and obtain the funds without any issues. The specialty of such companies is the minimum documentation required and the fast processing of funds. Although users should keep in mind to return the funds on time or they’ll not be granted funds in the future, and it’ll also be reflected on their credit score, collapsing any business prospects they have in their minds. And about interest rate – well, that’ll be a little higher than what most banks charge.

Lending platforms

Lending platforms are quite different from the usual Fintech solutions and provide an interesting solution to candidates for reigniting their business. These platforms don’t collaborate with any bank or institution. They take funds from one user and transfer it to the account of the one who needs. And how is that legal, or how the procedure works? Well, the platform works as a middle man for people who want to get high returns on the money they possess, and for the users who need cash to kick start their business. When it comes to the depositor, it assures them of a higher rate of return than what the banks offer. All they have to do is choose the business where they want to invest their money. Choosing a business can be a tricky part, and this is where guides turn out to be helpful.

To choose a proper lending platform, it depends on users for the kind of results they desire. If they want greater monetary benefits, the businesses with lower ratings might seem more attractive, and if they want to play safe, they’ll be drawn more towards higher-ranked businesses. Wait, wait, wait! Are there rankings? Well, yes. Lending platforms ranks businesses based on how they’re likely to perform. Businesses with lower probability of performing well are ranked lower, while the ones with better rankings are placed higher. And the best part about highly ranked companies is the fact that they act as an insurance for the investors. That is, in case the business doesn’t work out – users will get their money back from the lending platform itself without any issues.

FAQs

Why should I take credit from services that charge me a higher rate than banks? Isn’t it wise to select the lender with a lower rate of interest?

Ans. That might sound like a good idea in theory, but there are a lot of roadblocks that businesses face when taking a bank from loan. Banks require them to have an excellent credit score for loans amounting to hundreds of thousands of dollars, while the loan services mentioned don’t require a strong credit score for the same amount.

Why will someone want to invest in a lending platform on a business that might end up failing?

Ans. Not all investors love to play safe. Some of them might want to experiment with the extra amount they possess. And on top of that, the chance of a business failing is as much as its chance of succeeding. So on succeeding, investors will get their money back with a larger profit than any other investment option; High risk, high reward.

What happens if I fail to pay back the amount borrowed?

Ans. In case such an unfortunate scenario happens, both the services will deal with you in different ways. Fintech services will ensure that your credit score gets a negative impact, leaving you impaired from taking loans from banks in the future for any kind of business. At the same time, the lending platforms will either kick you out or decrease your ratings so that it becomes hard for you to find investors.