Do Peer to Peer Lenders Lend to Businesses?
Peer to Peer lending is a fast growing business and many people are looking to make use of it, both to borrow money and also to lend out their cash with the hope of getting better returns on their savings. If you are a business owner and you have been having a hard time getting a loan recently, you may be wondering whether peer to peer lenders lend to businesses as well as individuals?
The good news is that they do, and which lender you choose will depend on what sort of business you run and the size of the business. Let’s look at two of the most well known peer to peer lenders in the UK to see what they can offer to businesses.
LendingCrowd are a peer to peer lender who specialise in lending to businesses. To qualify for a business loan through LendingCrowd you need to have been trading for a minimum of 2 years, have a turnover of approximately £100,000 or more and be either a LTD/LLP company, partnership or sole trader. LendingCrowd also have a reputation for lending to businesses which banks may not usually want to take a risk on. For example, one business that LendingCrowd recently lent money to said:
“The banks won’t touch us. They don’t understand our business. We have approached the banks over the years but it isn’t possible to get this sort of funding”
Being the market leader in the UK peer to peer loan sector, Zopa focus more on lending to individuals, but they do allow money to be borrowed for business purposes if you operate your business as a sole trader. Getting a quote for a Zopa business loan is simple and easy on their website. They also don’t charge any early repayment penalties if you decide to repay the loan early to avoid paying more interest than you need to. One customer recently said of Zopa:
“I have found the whole experience of Zopa excellent, the rates are very competitive and you have complete visibility through the online account which I really like.”
So, if you are a small or medium sized business in need of a loan, it is encouraging to know that there are peer to peer lenders out there who lend to businesses depending on what their structure and turnover looks like. If you have been refused a business loan by your bank or building society you also shouldn’t just assume that peer to peer lenders won’t lend either, as this is often not the case. If you have any doubts about whether you will qualify for a business peer to peer loan, the best thing you can do is to hop onto one of the websites mentioned above and as long as you fit their general lending criteria, get a quote and see whether they will lend and if you are happy with the rates being offered by the company.