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Peer-to-peer lending or Bank lending?

P2P Loan Lor Bank Loan? A recent report from the UK Government shows that high street bank lending to small businesses is still declining, despite growth in the economy. Could peer-to-peer (P2P) lending offer a realistic business financing alternative? Of those using personal funds... 40% in 3 small businesses used personal funds in 2013. 45% Of small businesses believed they had no other option. Of small businesses used external finance in Q4 2013. What is P2P Peer-to-peer lending platforms, like Funding Circle, match investors directly with businesses that want to borrow. By removing the complexity of the banking world, businesses can access fast and simple finance, whilst investors have the potential to earn better returns by lending to them. Once the loan application is Businesses can apply online at anytime. When your loan is fully funded you can focus on growing your business while repaying your loan. accepted, investors compete to lend you money. 29% RBS Funding circle, the world's leading peer-to-business lender has nearly 91% 20% Lloyds of the small business banking market is dominated by the big five banks 17% HSBC 30,000 investors 13% Barclays 12% Santander Growth in P2P lending from Funding circle Decline in bank lending % growth +/- 17 16 15 14 2014 13 12 predicted to reach £300m 10 2013 £193m -1 2011 £21m -5 -7 -8 2007 2008 2009 2010 2011 2012 2013 2014 How to apply P2P Loan Bank Loan 1 Week Stage 1 Choose the correct P2P platform. Each peer-to-peer platform has its own eligibility criteria allowing you to choose the one that's best for your business. Stage 1 Choose the right financial product. Each loan will come with different rates, eligibility criteria, and terms and conditions, so find the one that fits your needs. Stage 2 Collect information about you and your business. You could need to provide a business plan, personal budget planner and personal asset statement. Stage 2 Collect proof of your business's finances. Gather the required information about your business to make the application process quick and simple. Up to date accounts for the last two years are also typically required. Stage 3 Proof of your business's finances. Cash-flow forecasts may be needed, while up to date accounts for the last two years are typically required. Stage 3 Complete the application form. Applying can take as little as 20 minutes, and you could have a response in just two working days. Stage 4 Draw up a cost breakdown. Your bank may want proof that you have correctly determined how much you need to borrow. 2 Weeks Stage 4 Your loan is listed on the Marketplace. Investors compete with each other to lend you money at interest rates they are happy to lend at. Stage 5 Make your application. Some banks allow you to apply online but typically you will be required to apply in person. Once you've submitted your application you wait to hear from the bank. Stage 5 Grow your business while repaying your loan! Once your loan is fully funded you can have access to the money in three working days. in your account 3-6 Months Stage 6 Wait for a decision. The whole process can take 3 months, although it might take longer if the bank needs to confirm the value of assets you're using to secure the loan. Stage 7 Wait for funds to clear if successful. If approved, you can receive funds within several working days. in your account P2P Loan Bank Loan 20 mins - Apply online. 2 days - Hear from a decision maker. 7 days - Your loan is listed on the marketplace. 3 days - Following the relevant documents being processed, funds will be released and in your account. 5 days - Organise a meeting with your bank. 3 weeks - Compile paperwork and make your formal loan application. 3 - 6 months - Your loan is approved and you receive your funds. Total -12 days (approx) Total - 3 months (approx),,,,, Funding Circle

Peer-to-peer lending or Bank lending?

shared by fundingcircle on Jul 30
Funding Circle explore how peer-to-peer lending works for small businesses, and how this compares to a more traditional bank loan which can often be a more complex process and can take as long as 15 -...


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