With the rise of crowdfunding and Peer-to-Peer (P2P) lending, banks and traditional financial institutions are no longer the only options for credit seekers. This is great news for SME business owners if you are looking to secure a loan for your business.
P2P loans can be the solution to SME financing. The loans provided can help SMEs build their businesses quicker and more easily than traditional loan products.
If you would like to compare financing from banks and financial institutions with P2P loans, read “Traditional Financial Institutions vs P2P Lending Platforms”
Meanwhile, here are some of the top reasons why SMEs should consider P2P loans:
A drawback of bank financing is that the application process can take weeks or even months as they tend to ask for more information and document submissions. Approval notifications can also take a while – a hindrance to businesses that can’t afford delays in getting financing loans. However, the application process of P2P loans can be completed in a matter of minutes as it can all be done online. Or even on mobile applications. Most P2P lending platforms also offer quicker approval notifications for your loan applications.
Traditional loan products may require up to 1 to 2 months of waiting for notification approval. By contrast, P2P loans can fulfill a loan within days, even hours so long as there is enough interested investors and depending on your loan amount.
P2P loans are unsecured, which is best suited for small businesses and SMEs as they tend not to have suitable assets for loan collateral. However, most reputable P2P lending platforms will ask for personal guarantees from company directors.
Perfect to Fund New Projects & Business Expansion
P2P loans allows businesses to access funds without giving up any equity. The loans are funded by a number of individual investors and its flexibility lies in being supported by online-based platforms that support the latest digital technology.
You only need to repay your investors’ financing along with interest on the money you borrow, much like a bank loan – making P2P loans is a fast and accessible way to raise cash injection.
Perhaps you have a growing SME with a lot of potential. But you need more working capital to grow your business. If this is the case, P2P loans may be the financing alternative you are looking for. Should you be interested in looking more into P2P loan products, click here.
In need for funds? Check your eligibility now!