Being rejected for a commercial loan from a bank can be a demoralising experience, but it’s one you shouldn’t take personally or allow to dampen your enthusiasm. After all, any successful business owner is going to need a pretty thick skin, especially when it comes to matters of finance.
Sometimes in life it’s better to go with the ‘alternative’ option. It could be an unconventional route to your dream career or simply a distinct taste in music, but for many of us the alternative seems like the right choice. When it comes to lending, alternative finance options are becoming mainstream thanks to big banks refusing funding to the majority of start-up businesses.
The conventional banking system simply isn’t working for most of us. Without alternative finance providers offering solutions such as peer-to-peer lending, crowdfunding and asset finance, most businesses wouldn’t be here today. These alternative finance specialists are plugging the gap the banks can’t fill, and giving a boost to the economy. Read more →
Last year in the UK, peer to peer lending reached new heights – lending £3.2bn across 2016, which is up 39% from the year before. Crowdfunding and P2P platforms have been around for over a decade now, and are showing no signs of slowing down. But what has made them so popular, especially with start-ups, small businesses and medium sized enterprises?
There’s a number of factors which have contributed to the boom of alternative finance solutions, such as peer to peer lending and crowdfunding. The uncertain global economic market has definitely played a part, as the recession impacted banks and traditional lenders. Also, consumers and now much more comfortable using the internet to apply for loans and transfer money, which opens up a wealth of opportunity for the financial sector.
They are often grouped together but there is a distinct difference between crowdfunding platforms and peer to peer lending. In both cases, it is usually a number of investors who will contribute to the amount you borrow.
P2P is very similar to a business loan from a bank, except that you’re borrowing off real people. You’ll pay back interest to your investors in return for the borrowed finance, and it’s a flexible way for companies to receive a fast cash injection.
Crowdfunding is different because you will receive money from a group of individuals or organisations to make up the amount you require. You will then need to offer your backers some sort of reward – for start-ups this could be a perk such as a discount or free product. Alternatively, if you’re looking for big investors then you may need to offer equity in your business or a profit share – think of Dragon’s Den.
Usually, crowdfunding is a great option for entrepreneurs and start-ups while peer to peer lending is more suited to established businesses.
These types of alternative finance are now mainstream because it is so difficult to get a traditional business loan from a bank. Lending has decreased for years now, making it impossible for people to get their business ideas off the ground. Without personal investment, entrepreneurs are left with no choice but to pitch their idea online to investors. Even established businesses with a strong trading history can struggle to be accepted for financial help from a bank.
Another reason why peer to peer lending is attractive is the generally low interest rates. If you apply for P2P through a financial broker, they will look at all offers and all interest rates and offer an average interest rate. Larger financial institutions have less competition so don’t offer the best deal.
Ready to see what all the fuss is about? Contact us to find out more about P2P or crowdfunding.
Unless you have been actively seeking a loan or financial help in the past few years, you may not have come across the term ‘peer to peer lending.’ However, after receiving quite a few years of global success, peer to peer funding has took the financial market by storm.
Peer to peer lending platforms hit the financial market about a decade ago – but there are still many Brits who have never heard of it or don’t understand how this type of borrowing works. Alternative finance solutions such as crowdfunding and peer to peer lending can help businesses access cash which wouldn’t be available to them from a bank, and is also a way for investors to get a healthy return. Peer to peer lending schemes can also be used for personal borrowing, to fund debt consolidation or home improvements for example.
Because this is so far away from traditional lending, it can be difficult to understand. Genie Lending’s peer to peer specialists explain below everything you need to know about peer to peer lending.
If you’re starting up a business or your company needs a cash injection, then you’ll need to apply for business finance. Bank lending figures are continuing to fall, so you might be wasting your time applying for a business loan from a bank. However, entrepreneurs have found plenty of other ways to secure business finance so don’t despair – simply choose one of the options which sound suitable for your requirements. Read more →
There are many different reasons why you may need a loan. You could be using the cash to buy a new car, start up a business or simply pay off outstanding bills. There are many different financial solutions available, and depending on the purpose of the loan there could be an option which is more suitable than another. The decision is also based on how much money you need to borrow, and how quick you can pay it back. Let’s take a look at some of the different loans available and which one suits you best. Read more →
