Alternative Financing: Peer-to-peer Lending

Many small business owners find it challenging to obtain financing from banks or other traditional lending institutions. Peer-to-peer (P2P) lending has changed the process of borrowing money by allowing businesses to pitch to an online audience of potential lenders. 

Peer-to-peer Loan Process
In Peer-to-peer lending, small business owners complete an online application that factors in your credit score and debt-to-income ratio to determine your interest rate. Qualified small business owners receive a list of unsecured personal loan options to select from.

Small Business Benefits
Peer-to-peer loans typically offer credit at a lower rate, get the money faster often in a few days, and are less risky for lenders. Peer-to-peer lending offers fixed monthly payments, flexible terms, and no prepayment penalties, and no hidden fees.

Lender Benefits
Peer-to-peer lending benefits lenders who typically see a better return on investment in a growing billion dollar industry. Lenders are putting their money into one large loan they invest in a percentage of multiple loans. Peer-to-peer lending offers lenders a diversified portfolio with monthly cash flow. Lending standards have become more regulated since the Securities and Exchange Commission (SEC) required websites like and to register as securities in 2008. 

Peer-to-peer lending is a new way of small business financing that is still being evaluated. It’s not available in all states and the rules and terms are changing constantly. It could be a great resource for new and existing small business owners and offers a viable alternative to traditional banks. 

Rochelle Robinson
<div> Rochelle Robinson is a business & wealth advisor serving as a CEO of WealthSide Capital, a pioneer in business and financial management services and Managing Editor of, a leading interactive financial empowerment community. Rochelle is focused on small business solutions, personal finance management, and achieving financial freedom through wealth creation.<br /> <a href="" target="_blank" title=""></a> | <a href="" target="_blank" title="Rochelle Robinson Twitter">@robuildswealth</a> | <a href="/author/rochelle robinson/all-posts" target="_blank">More from Rochelle</a> </div>


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