MM contrib

Giving-Back
Developing-Interests
Finding-Jobs
Travel
Health
Money-Management
Mothers-Reinvented

Blogs

 Latest contributions 
Age Action Alliance
Peer to peer lending
Will the increase in Standard Variable Rates make you twist?
Debt Counselling
RSS Feed for latest articles

Peer to peer lending

It started as a way for individuals to lend their spare cash to someone who needed it  -  it is becoming a way for small businesses to get loan finance which the banks are unwilling or unable to supply.  By removing the bank from the transaction, the lender gets a higher rate of interest and the borrower pays lower rates, and the peer to peer group in the middle takes a fee.    

 

The UK Govenment is getting quite enthusiastic about this development as a way of helping small businesses get the loan capital they need for expansion, and are committing £100 million to oil the wheels.   But at the moment, peer to peer groups are unregulated and lenders (who are still mainly individuals) are not protected by any compensation scheme -  so it is a case of 'lender beware' .    According to the FT, average defaults on riskier loans are around 6%.  

 

There is a comparision site for peer to peer lending at www.p2pmoney.co.uk, which will give you an idea of current rates.

 

For the peer to peer goups themselves, see:

 

www.fundingcircle.com/
.
www.thincats.com/
.
http://uk.zopa.com/
.
http://www.folk-folk.com
.
www.rebuildingsociety.com

 

www.marketinvoice.com/ has a different model, which allows companies to auction their invoices.

 

 

 

Feedback:
danraj (Guest) 04/01/2013 18:56
You should also include rebuildingsociety.com they've made a lot of progress in their first 3 months & offer better rates of return to investors because their marketplace is not as competitive.