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Benefits and drawbacks of Peer-to-Peer Lending for your small business

Benefits and drawbacks of Peer-to-Peer Lending for your small business

The peer-to-peer (P2P) lending enterprize model allows smaller businesses (SMBs) to boost money without necessarily approaching conventional lenders such as for instance banking institutions. More especially, this business design provides business owners an online platform they may use to communicate and get funds straight from prospective investors.

To find out more, browse the infographic below produced by Norwich University’s on line MBA system.

A synopsis of P2P Lending

Contemporary P2P financing activities ordinarily just just take place online where borrowers and lenders join P2P online platforms such as for example Prosper and Lending Club. Individuals typically sign up as either borrowers or loan providers. After joining, a debtor submits that loan application for review along side an agenda detailing exactly how she or he promises to invest the funds raised. This stage typically determines whether that loan application is viable and aligns using the borrower’s investment techniques.