Reasons Why Peer-to-Peer Lending Is Perfect for Small Businesses
Likelier to Understand your Requirements
There are only so many financial institutions and banks in place to help a small and medium enterprise (SME) which is looking for a traditional loan. Conversely, in peer-to-peer borrowing, an SME has to simply place its requirements, and a lot of individual lenders get to see and decide on those. If your credit rating is good, it is very likely that you will get several proposals to finance your business, in a reverse-auction way. It is then up to you to select the best deal, and your chances are multiplied owing to the scores of lenders.
No Collateral Requirement
Small and medium-sized businesses often have trouble offering assets for a business loan. This is particularly true for businesses in the services sphere. Banks often deny loans without collaterals, so most SMBs find it extremely difficult, or submit their personal property to secure the loan. Peer-to-peer borrowing does not require collaterals. To obtain funds through a P2P lender, all you need besides good credit rating is a demonstrable propensity to pay back the borrowed money.