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Can I get a business loan through P2P lending?

How easy is it for businesses in the UK to get a quick business loan? Small and medium businesses accounted for 99.9% of private sector companies in the UK at the start of 2015, and with over 60% saying that they have plans to grow in the near future, the demand for business finance shows no signs of slowing. An important aspect of raising finance for SMEs is how quickly they can access funding, as well as how complex the process is. Securing a quick business loan enables a company to fulfil its ambitions as soon as possible, without the uncertainty of a long decision process that means the business must put its plans on hold until funding is received. Many small and medium businesses in the UK are accustomed to applying to their bank for a loan, but with peer-to-peer (P2P) lending on the rise, there could be a quicker way for companies to access finance. In this blog, we look at how P2P loans could provide faster funding for UK businesses.


Quick application process

The first step is to choose the platform that’s right for your business, as some will have different eligibility criteria and will offer loans with varying interest rates and loan terms. LendingCrowd requires borrowers to have been trading for two years and have around £100,000 annual turnover. Most sites will look for documents to demonstrate your company’s finances, usually including two years’ accounts. Some lenders will also ask for management information, bank statements, and possibly a business plan to show the directors’ plans. Whereas a bank might traditionally require you to apply for finance in person, P2P lenders tend to have online application forms which can take as little as 20 minutes to complete.

The simple application processes offered by P2P lenders can help companies get a quick business loan without having to spend time collecting extensive financial information and proof of assets.


Quick decision

Another advantage of P2P lenders is that they are typically able to provide a decision on a loan application very quickly; in some instances this can be as little as two working days. This means that businesses applying for loans will not have to wait for weeks to get a response to their application, and so they will be able to move forward with their expansion plans quickly. Traditional finance providers often have response times ranging from several weeks to several months, particularly if they need to confirm the value of the assets being used to secure the loan. This can leave the business in limbo, unable to start making progress on its plans as it is uncertain whether the funding will be approved.  


Quick turnaround

If the business’s loan application is successful, the loan will be listed on the P2P lender’s marketplace, and investors will bid to have their funds included in the loan. This can lead to investors competing by bidding at lower interest rates, potentially leading to a lower overall interest rate for the loan, reducing the cost of finance for the borrower.

Once the loan is fully funded and the business accepts the funding offer, the necessary loan contracts and security documents will be completed by the P2P lender and the borrower. The funds will then be transferred to the borrower usually within three working days, allowing the company to start growing as soon as possible.

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Lending Crowd

Lending Crowd

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If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

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The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

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