business-lending

Peer-to-peer business lending

Peer-to-peer lending: A new way to find business finance.

Peer-to-peer lending (P2P) has been making strides in Australia since its inception in 2012. While it was originally restricted to personal finance, P2P business loans are now also available. But exactly what is peer-to-peer business lending, and how could it work for your new or established business?

What is P2P business lending?

Taking out a peer-to-peer loan means that while you apply to a lender, your loan will actually be financed by peer investor/s. The P2P “lender” acts as an intermediary for the loan, charging a fee for doing so. The application process works in a similar way to any other lender, but the source of funds come from a single investor or pool of investors. When it comes to repaying the loan, you repay the investors directly using the lender as an intermediary.

Alternatives to business P2P loans you can apply for

Rates last updated October 20th, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
NAB QuickBiz Loan
$5,000
$100,000
1 to 3 years
$0
Apply for up to $100,000 and get a response within 60 seconds. No upfront or ongoing fees and a transparent fixed rate.
Lending Express Business Loans
$5,000
$500,000
0.25 to 2 years
$0
Apply online for up to $500,000 and get access to over 25 lenders through Lending Express.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
0.25 to 5 years
$0
A Small Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 60 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Moula Business Loan
$5,000
$250,000
0.5 to 2 years
$0
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
Spotcap Loans
$10,000
$400,000
0.25 to 2 years
$0
Benefit from a fixed interest rate and no upfront fees with a loan available up to $400,000. Must have been operating for at least 18 months and have turnover over $200,000.
GetCapital Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A flexible business loan up to $500,000 with convenient top up and redraw facilities. Business must have been operating for 9 months+ and have monthly sales of $10,000+
businessloans.com.au Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A business loan up to $100,000 for unsecured loans, or $500,000 for secured loans that you can use for any business purpose. Transparent costs and redraw facility available.
Prospa Business Loan
$5,000
$250,000
0.25 to 2 years
$0
A business loan available up to $250,000 that can be funded in 1 business day. Must have a turnover of $6,000+ per month and provide 6 months of trading history, 3 months history for existing business purchases.
OnDeck Business Loans
$10,000
$250,000
0.5 to 2 years
2.5% origination fee
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.

Compare up to 4 providers

How does the peer-to-peer business lending application process work?

Peer-to-peer business loans are available for a variety of business purposes. Applying for one of these loans still requires that you meet the lender’s eligibility criteria. You will usually need to be over the age of 18 and the company director/s will need to have good credit history. The loan is risk-based as it is financed by investors, so the higher a risk you’re determined to be to fund, the higher your interest rate will be. Once your application is accepted by the lender it is posted up for potential investors. One or several investors fund your peer-to-peer business loan until you receive your entire loan amount. Then you repay these investors directly, usually via direct debit.

What features do P2P business loans offer?

Peer-to-peer lenders typically offer these features:

  • Convenient application. Most lenders let you apply online in a few minutes. You’ll usually find out if you’re eligible that same day or very soon after.
  • Easy repayments. You won’t have to worry about making your repayment on time – repayments are direct debited out of your nominated bank account on the due dates.
  • Borrow and invest. There are features for both business owners and investors, with investors having access to a new asset class that potentially yields high returns, and business owners being able to apply for an alternative source of business finance.

How you can compare your options

Finding a P2P lender that matches your business needs is important. No matter what you need the loan for, keep the following points in mind when comparing your loan options:

  • Loan purpose. Business peer-to-peer loans are available for a variety of purposes, but it’s best to confirm the suitability of the loan before submitting your application. Make sure to check whether the loan is only available for new or established businesses.
  • Business eligibility. Does your business need to have been established for a certain period of time? Does it need to be have a certain annual turnover?
  • Loan cost. The interest rate for a P2P loan is usually determined on a risk basis. This is calculated using the information you provide in your application. However, you need to keep in mind upfront establishment fees, early repayment fees and any other fees that may apply.
  • Turnaround time. Will you be able to get the loan when your business needs it? Check the average turnaround time offered by the lender you’re applying with.

What benefits and drawbacks come with these loans?

  • An alternative source of funding to traditional banks
  • Business loans from peer-to-peer lenders can offer more competitive rates
  • A quick application and a fast turnaround time
  • Interest rates vary depending on the information you provided in your application
  • Regular repayments may not suit businesses with irregular profits or businesses that are seasonal

Is there anything to consider before applying?

Before applying for any type of credit it’s important to compare your options and consider if the lender is right for you. While you generally won’t be given an interest rate until you submit your application, you can find out about application fees as well as ongoing fees to give you an idea of the cost of the loan. It’s also best to confirm your eligibility before submitting your application if you are unsure about criteria. Once a loan is offered, compare it to conventional business loan rates to make sure you're getting a competitive deal.


Peer-to-peer business lenders can offer a competitive source of business finance to consider, but it’s always best to compare your options thoroughly before settling on which funding avenue to take. Find out more about consumer peer-to-peer lending

Picture: Shutterstock

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.

2 Responses

  1. Default Gravatar
    ToddMarch 7, 2018

    I have a business and I need to borrow money for stock but I’m only on Centrelink at the moment. I have a car valued at $16000 and I want to borrow money against that car. Are there any lenders that could help me?

    • Default Gravatar
      LiezlMarch 22, 2018

      Hi Todd,

      Thanks for reaching out to us at finder.

      Lenders listed on this page provide financing even to those on Centrelink. They also offer secured loan so you may use your vehicle as collateral but that will be subject to the lender’s approval and depending on the amount you wish to borrow.

      Cheers,
      Liezl

Ask a question
Go to site