PERSON-TO-PERSON (P2P OR PEER-TO-PEER) LENDING is an alternative form of lending that happens directly between individuals (“peers”) without going through a bank or other traditional financial institution. P2P loans have several advantages. Although P2P loans needn’t involve a middleman (that’s why they’re called “person-to-person”), loan brokers and consultants can earn commissions helping borrowers obtain such loans.
P2P LOANS ARE BECOMING MORE AND MORE POPULAR, and have given rise to brokers and servicers called “peer-to-peer lending companies.” P2P loans are a bright spot on the lending horizon for many people, for reasons such as:
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If you’re a borrower seeking a loan for business or real estate, you may be able to get a P2P loan when other types of funding are out of reach. Because P2P lending is done mainly over the Internet, firms that cater to P2P borrowers have fewer expenses and can more easily make loans to people with less than perfect credit. P2P loans often have lower interest rates, too.
Additionally, P2P loans offer quick access to funding. Borrowers can often get their money within a couple of weeks, sometimes less.
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If you’re a loan broker or consultant, you can make money helping borrowers get P2P loans from individual lenders or investors.
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If you’re someone who has cash to lend, you can make money (as much as 7% to 14%) providing P2P loans to friends, colleagues and people with promising business or real estate projects.
This comes with some risk, since borrowers can default on a P2P loan just as they can on other types of loans. However, most firms and websites that facilitate the P2P loan process provide ample “due diligence” details about each P2P project in order to help investors choose wisely as to which projects they wish to invest in.
P2P LOANS HAVE SOME ATTRACTIVE FEATURES for borrowers. For example:
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P2P loans are like personal loans—they have a wide range of potential uses.
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P2P loans are typically unsecured, so the borrower doesn’t have to come up with collateral to get the loan.
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P2P loans have lower interest rates and fewer fees than loans frrom banks and other lenders.
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P2P loans are easier to qualify for—for instance, the borrower is not always required to have their income or credit history checked.
WHEN BANK LOANS ARE HARD TO GET, a P2P loan may be just what a borrower needs. Similar to “crowdfunding”—where members of the public band together to fund a deal—P2P lending is growing in popularity and becoming easier because of the Internet. Like crowdfunders, P2P lenders are sometimes called “platforms” and may operate from a website.
BECAUSE TODAY’S P2P LENDING IS STILL RELATIVELY NEW, brokers, borrowers and investors should read up on the rules and laws about P2P loans before getting involved. Contact a qualified attorney or state financial agency for additional help and information.
BELOW ARE SEVERAL POPULAR COMPANIES that do P2P lending and/or crowdfunding. Some of these firms are located outside the United States.
For additional tips and resources for real estate loans, business loans, and person loans, visit the International Wealth Success website.
Here are your P2P lending companies.
P2P LENDING COMPANIES
PROSPER FUNDING LLC
101 Second Street, 15th Floor
San Francisco, CA 94105
Tel: 866-615-6319
Website: prosper.com
ZOPA LTD.
6th Floor
90 Fetter Lane
London
EC4A 1EN
United Kingdom
Tel: 0207 580 6060
Website: zopa.com
40BILLION
Atlanta, GA 30274
Tel: 770-280-5646
Website: 40billion.com
LENDINGCLUB
71 Stevenson, Suite 300
San Francisco, CA 94105
Tel: 888-596-3157
Website: lendingclub.com
LENDKEY
104 W. 27th St.
4th Floor
New York, NY
Tel: 800-881-8985
Website: lendkey.com
GREENNOTE
10640 Mather Blvd, Suite 100
Mather, CA 95655
Tel: 866-711-5620
Website: greennote.com
VIRGIN MONEY
Jubilee House
Gosforth
Newcastle upon Tyne
NE3 4PL
United Kingdom
Tel: 0845 602 2106
Website: virginmoney.com
FUNDING CIRCLE
3 Dorset Rise,
London, EC4Y 8EN
United Kingdom
Tel: 0207 401 9111
Website: fundingcircle.com
PEERFORM
369 Lexington Ave,
New York, NY 10017
Tel: 800-338-8049
Website: peerform.com
ASSETZ CAPITAL
23 Berkeley Square,
London, W1J 6HE
United Kingdom
Tel: 0207 870 1023
Website: assetzcapital.co.uk
AUXMONEY
Germany
Tel: +49 211 542 432 22
Website: auxmoney.com
FOLK2FOLK
13 Westgate Street Launceston, Cornwall PL15 7AB
United Kingdom
Website: folk-folk.com
FUNDINGKNIGHT
International House
Southampton Int’l Business Park
George Curl Way
Southampton
SO18 2RZ
United Kingdom
Website: fundingknight.com
FUNDINGSECURE
1210 Parkview
Arlington Business Park
Theale, Reading
RG7 4TY
United Kingdom
Tel: 0800 690 6568
Website: fundingsecure.com
RATESETTER
United Kingdom
Tel: 020317426255
Website: ratesetter.com
SMARTIKA
Via Vittoria Colonna, 7, 20149 Milano, Italy
Tel: +39 02 4070 6132
Website: smartika.it
THINCATS
The Dovecote, Pimlico Farm, Austrey Lane, No Mans Heath, Tamworth. B79 0PF
United Kingdom
Tel: 01827 830864
Website: thincats.com
LENDICO
Johannisstr. 20
10117 Berlin
Germany
Tel: 030 3982052 – 60
Website: lendico.de
CROWDFUNDING WEBSITES
33needs.com
AdoptAnything.com
angellist.com
BankToTheFuture.com
Bolstr.com
Buzzbnk.org
ChipIn.com
circleup.com
Conzortia.com
CrowdCube.com
Crowdfunder.com
crowdrise.com
CrowdSupply.com
Fundable.com
FundedByMe.com
Funderthunder.com
Fundly.com
FundMyWish.com
FundRazr.com
giveforward.com
GoFundMe.com
gogetfunding.com
Healthfundr.com
ignitiondeck.com
IndieGoGo.com
Innovestment.com
investedin.com
Kickstarter.com
Microryza.com
MicroVentures.com
MosaicInc.com
Mycofolio.com
Peerbackers.com
Peoplefund.it.com
Petridish.org
PledgeMusic.com
Pozible.com
ProFounder.com
quirky.com
razoo.com
rockethub.com
ScoutFunder.com
Seedrs.com
Seedups.com
selfstarter.com
Sellaband.com
somolend.com
SponsorGoal.com
Sponsume.com
Startupaddict.com
Upstart.com
Wefunder.com
YouCaring.com
