Peer to business lending

Peer to peer lending - , unlike depositing money in banks, peer-to-peer lenders can choose themselves whether to lend their money to safer borrowers with lower interest rates or to riskier borrowers with higher returns, in the us peer-to-peer lending is treated legally as investment and the repayment in case of borrower defaulting is not guaranteed by the federal government (u. Investors interested in socially conscious investing, peer-to-peer lending offers the possibility of supporting the attempts of individuals to break free from high-rate debt, assist persons engaged in occupations or activities that are deemed moral and positive to the community, and avoid investment in persons employed in industries deemed immoral or detrimental to community. [citation needed] as a result, lenders can earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates,[1][2][3] even after the p2p lending company has taken a fee for providing the match-making platform and credit checking the borrower. Lending intermediaries are for-profit businesses; they generate revenue by collecting a one-time fee on funded loans from borrowers and by assessing a loan servicing fee to investors (tax-disadvantaged in the uk vs charging borrowers) or borrowers (either a fixed amount annually or a percentage of the loan amount).

Peer-to-peer lending - the pros and cons | FT Business

Subscribe to the Financial Times on YouTube: Emma Dunkley, FT retail banking correspondent, examines ...