The internet has brought us many exciting new developments in the last few years. Some have just been good fun while others, like peer to peer lending, promise us a better way of managing our finances and our lives.
Some analysts suggest that peer to peer lending sites like LendingCrowd will soon be by far the most popular way for small businesses to borrow money in the future. Indeed, the industry doubled in size in 2015, as the firms offering this way of borrowing handed out some £2.2 billion in loans.
An impressive total of some £4.4 billion has been borrowed in this way since peer to peer lending first burst onto the scene. The number of borrowers is increasing all the time, while investing money in this way is also becoming an ever more attractive idea for many.
With all of this in mind, we thought we’d take a closer look at one of the more popular business peer to peer lending sites in this LendingCrowd review.
With bank loans now becoming harder to get for some businesses, the prospect of getting a peer to peer loan offers a chance to grow your business or else to get through some difficult times more easily.
The first thing to check out when looking at this form of lending is the interest rate. The good news is that, at the time of writing, the LendingCrowd site offers loans from an indicative rate of just 5.95%
Any amount from £5,000 up to £250,000 can be asked for and the loan term can go up to 5 years. This is all good news and it is also reassuring to see that the fees are easy to understand and start from as little as 2%, based upon the length of the loan.
The current borrower requirements are also very simple and clear. You need to have been trading for at least 2 years and have a turnover of around £100,000 or more. Finally, it is important that the borrower is a limited company, an LLP, a partnership or a sole trader.
Of course, with all of those people wanting to borrow money for their businesses, it is just as well that there are plenty of others who are happy to lend money to them. If you are more interested in investing your cash (while helping someone out in the process) then this is also a viable option with LendingCrowd.
In this case, it is possible to get an attractive interest rate of up to 12.25%. There is an annual charge of just 1% on the money that you invest here.
Best of all, you get to look through the different companies looking for funding and decide which one is right for you. By doing this you get to invest in something that interests you, something that you have knowledge of or just something that feels right.
Getting Started on Borrowing Money
When it comes to borrowing money the process is smooth and painless. The first step is to get a quote on the site. You can find out in a matter of seconds how much it would cost you each month to get the funds that you need.
Once you have done this there is a simple application process to follow. You can quickly get signed up and then move on to the short application form. Once you do this the LendingCrowd credit team check out your details and assign you a Credit Band. This is an important step, because you will pay less the better your band rating is.
After this, you appear on their Loan Market section. This is where the people who are looking to invest money can see your details and bid on them if they are interested. As soon as the requested loan amount has been completed you can agree to it and get hold of the money.
Getting Started on Lending Money
If you want to invest through this site then you start off in the same way as those who are borrowing. The first step is to set up a new account with a few basic personal details. After doing this you will get access to the Loan Market.
At this stage you can look through the list of companies looking to borrow and decide which ones you most like the look of. You have the choice of bidding for a loan at a rate you are happy with or else investing immediately in the loan exchange section.
Once the loan reaches its limit the most attractive bids will be accepted. If your bid is among them then your offer will be accepted and your investment will begin. After this happens, you will start to get through your monthly payments from your investments.
Help and Support
With peer to peer lending still being a relatively new idea, it is reassuring to find a well-laid out site that explains everything in detail and takes away any sense of mystery from the process.
A useful feature to look out for is the mobile app offered by LendingCrowd. This is available on the iPhone and iPad and can be downloaded for free from the App Store. The app can then be used to invest and to keep up to date with your account.
There are also some important guides on the site that are a must-read for anyone who is new to the idea of peer to peer lending. These guides take you through the process and answer all of the most frequently asked questions. It is vital that you read the part about how to minimise risk by diversifying your investments as much as you can.
The new era of peer to peer lending has definitely begun, and LendingCrowd is one of the top places to get started on this. Whether you want to raise funds for your business or invest in a business, the LendingCrowd website is one that you will want to check out. It is easy to understand and can get you started in no time at all.