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Peer-to-peer business lending

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

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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

Data indicated here is updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Prospa Business Loan
$5,000
300,000
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.
Valiant Finance Business Loan Broker
$5,000
1,000,000
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
OnDeck Business Loans
$10,000
250,000
6 months to 2 years
3% of loan amount
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.
Max Funding Unsecured Business Loan
$2,000
300,000
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment fees.
Westpac Business Loan
$5,000
1,000,000
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
ANZ Unsecured Business Loan
$10,000
1,000,000
Up to 15 years
$600
You can choose a fixed or variable interest rate
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.
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If you're waiting on payment from invoices that could help you manage your cash flow, invoice financing could be an option to consider. It's a type of business loan that is secured by the unpaid invoices and comes with reduced risk, no asset requirements or interest payments.

Compare invoice financing products below.

Data indicated here is updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Timelio Invoice Finance
$10,000
100,000,000
Up to 4 months
$0
Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.
Scottish Pacific Invoice Finance
$200,000
100,000,000
From 1 year
No set amount
Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $200,000 in invoices.
Key Factors Selective Invoice Finance
$0
3,000,000
From 1 day
$0
Get access to funds in 4 hours. Pay as you use with no minimum, up to 80% advance on invoices, no lock-in contract and transparent fees.
Note: Must have annual sales turnover between $500,000 and $30 million.
BCashflow Positive Invoice Finance
$100,000
3,000,000
From 1 year
$0
Get funded up to 90% of the invoice in 4 hours. No hidden fees, 1.8% of the invoice for the first 30 days, and 0.06% per day after. Note: Suitable for businesses with monthly turnover between $100,000 and $3,000,000.
Scottish Pacific Selective Invoice Finance
$10,000
1,000,000
1 to 3 months
$500
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.
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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

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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

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