Top Peer-to-Peer Business Lending Platforms
Lending capital to businesses is a great way to earn a conservative return on your investment portfolio. Peer-to-Peer lending has provided investors with smaller portfolios a stake in the business lending market. Businesses have their physical business to put up as collateral, a consistent way to make money, and traditionally, work on credit.
Businesses are also always in need of credit to continue with operations. It is much easier and sensible to buy stock or retail on credit as opposed to cash. It is easier to apply for a large or equal sum of credit for a product, or the ability to produce and pay for it later without causing delays in the business process. Peer-to-Peer lending essentially moves this industry that used to be financed by the banks and only specific financial institutions over to everyone. With 10 EUR or US dollars anyone can lend money to businesses and reap a profit.
Even so, not all businesses were created equal. Some businesses are simply bad investments and perhaps, the businesses are seeking loans just to stay afloat. Such businesses may have assets that have depreciated too long or mismanagement that is crippling the business and thus hindering its ability to generate revenue. Some platforms have taken it upon themselves only to provide loans to those businesses they deem worthy and capable.
PeerBerry
PeerBerry is a Lithuanian Peer-to-Peer lending platform founded in 2017. PeerBerrys minimum deposit is 10 EUR and offers a yearly return of 9 - 13 percent. PeerBerry offers a multitude of different loan types, from consumer loans, car loans, mortgage loans to business loans. This is because PeerBerry are loan originator(LO) aggregators. They host a variety of LO's on their platform to service loans to lenders.
Business finance is only a part of PeerBerrys expansive platform. Moving forward, PeerBerry offers an auto-investing tool which can be customized in terms of risk factor, loan duration, location and loan amount. PeerBerry's platform in general is easy to use and investors can opt for daily reports regarding the health of their investment.
What makes PeerBerry different from other Peer-to-Peer lending platforms is that PeerBerry and their LO partners are already financing the loans in full and the lenders can simply partake in a minority percentage of their lending business. The marketplace has yet to open up a secondary market to investors. PeerBerry offers two guarantees, buyback guarantees and group guarantees.
Let us briefly discuss these two functions.
Buyback Guarantee
A buyback guarantee is an agreement within the loan contract that indicates that if the loan goes unpaid for a particular amount of time, the lending service buys the loan back from the investor, providing full principal and interest accrued.
Group Guarantee
A group guarantee is triggered when the LO is unable to buy back their loan agreements. This is only possible with a loan originator aggregator that hosts multiple lending services on their platform. The other multiple LO's hosted on the platform pool their financial resources together in order to refinance the loan originator who is defaulting.
October
October is a French Peer-to-Peer lending platform founded in 2014 that supports small to medium sized businesses in Europe or SME's. 66 percent of Europe's work force work in SME's and it makes up roughly 56 percent of Europe's economy. These businesses are an essential and integral part of Europe's economy. October's minimum entry deposit is 20 EUR and offers a humble return of 3 - 7 percent, currently one of the lowest returns in the market.
October seeks to keep this economy thriving and successful by providing those profitable businesses affordable loans to expand and continue generating revenue. October is supported by the EU and is in many ways an extension of a greater EU project. October reports a default rate of below 3 percent which is way below market standard and has a 100 percent success rate on fund recovery.
October providing a small return is definitely a turn off, however, their dedication to investors' safety and certain profitability makes them worth reconsidering. October's platform does not feature an auto-investing tool or buyback guarantee, and investors are expected to do their due diligence on each project they believe to be a wise investment. October does offer a secondary market.
Mintos
Mintos is a Latvian Peer-to-Peer lending platform that was founded in 2014. They have a minimum investment deposit of 10 EUR and offer a projected yearly return of 9 - 13 percent. Mintos is Europe's largest Peer-to-Peer lending platform and has won many awards for their genius, innovation and attitude that they have brought to Peer-to-Peer lending.
Mintos is a loan originator aggregator, they invite a multitude of loan originators on their platform to service loans out to lenders. Similiar to PeerBerry, business finance is only a part of Mintos' overall loan marketplace. Mintos offers buyback guarantees but have been subject to scrutiny in 2019 and 2020 due to their inability to enforce the guarantees. 16% of Mintos' investors have negatively felt the impact of Mintos inability to enforce buyback guarantees.
There are many different loan choices and types on Mintos. Mintos offers loan from consumer finance, debt consolidation, mortgage finance, auto finance and business finance. Mintos' platform also features an easy to use auto investing tool as well as three auto-investing algorithms for investors to choose from. Mintos also offers a secondary market for the purpose of liquidity.
EstateGuru
EstateGuru is a Peer-to-Peer mortgage lending platform founded in Talinn Estonia. Minimum entry investment on the platform is 50 EUR. However, in order to use their auto-investing tool, 250 EUR is required. Investors on EstateGuru can expect a yearly return from roughly 8 - 13 percent.
Every business needs a location, home office or brick and mortar. Businesses are also great entities to lend capital too because they have a means to make an income. EstateGuru receives applicants who request loan servicing for something related to real estate, businesses included. The real estate factor is to ensure that EstateGuru can acquire a first or second ranked mortgage for the property. The purpose of this mortgage is collateral, the reason why EstateGuru requires collateral is in the case of a defaulted loan. Without collateral there is not much to guarantee investors that their funds are safe with the platform.
EstateGuru offers no buyback guarantee but all investments are backed by mortgages which is in some sense the same thing.
EstateGuru also has a secondary market in case investors need to liquefy their investments, there is a 2% fee to use the service. EstateGuru has proven time again that they are capable Peer-to-Peer lending platforms.
Market Type
Business Loans
Average Returns
3 - 7%
Minimum Investment
EUR 20
Signup Bonus
EUR 20
Registered users
43,000
Total funds invested
EUR 1 Billion
Default rate
3%
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Card, Bank Transfer, TransferWise
Withdrawal methods
Bank Card, Bank Transfer, TransferWise
October specializes in small risk business loans specifically to SME's in Europe. October has a great track record of fund recoveries, a solid mission and a very strong foundation. October's business and risk strategy is worth the time to read.
Market Type
Consumer Loans
Average Returns
9 - 12%
Minimum Investment
EUR 10
Signup Bonus
0.5%
Registered users
70,000
Total funds invested
EUR 1.8 Billion
Default rate
7%
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, Bank Card, TransferWise
Withdrawal methods
Bank Transfer, Bank Card, TransferWise
PeerBerry is an excellent P2P platform to its 100 percent successful fund recovery track record. They offer slightly below market interest rates in exchange for a guarantee users will never lose their funds.
Market Type
Consumer Loans
Average Returns
9 - 12%
Minimum Investment
EUR 10
Signup Bonus
1%
Registered users
500,000
Total funds invested
EUR 8.9 Billion
Default rate
16%
Regulating entity
Financial & Capital Market Comission (Latvia)
Buyback guarantee
Secondary market
Payment methods
PayPal, Bank Transfer, Credit Card, TransferWise
Withdrawal methods
Wire transfer, Credit Card
Mintos is P2P loan originator aggregator whom after years of slow growth exploded and became the number one P2P lending platform in Europe. Find out why in this review. Is Mintos an investment worth considering?
Market Type
Mortgage Loans
Average Returns
8 - 13%
Minimum Investment
EUR 50
Signup Bonus
0.5%
Registered users
150,000
Total funds invested
EUR 700 Million
Default rate
6%
Regulating entity
Bank of Lithuania
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, SEPA, Credit Card, TransferWise
Withdrawal methods
Bank Transfer, SEPA, Credit Card, TransferWise
EstateGuru is a highly recognized and successful P2P Lending company. What makes EstateGuru as P2P Lender so profitable and secure? Explore the breakdown with P2PIncome's thorough analysis of EstateGuru's strengths and weaknesses.
Verdict
What all these platforms have in common is that they are all incredibly dedicated to ensuring their investors funds are guaranteed and overall health to the lending ecosystem. This is only possible because the borrowers themselves are bound to the loan contract. Peer-to-Peer lending platforms fail when their borrowers stop paying their lenders. If there is a relationship that is being contributed to from both sides, then the platform itself is healthy.
Some of the strongest Peer-to-Peer lending are those that support businesses. There's a lot of stigma in society about debt, credit cards and lending money. And while in many places these criticisms are valid, in others, they miss the overarching point. Credit is the movement of money that underlies all the accomplishments modern society has achieved. The nature of "I'll pay you later" has been one of the most monumental changes in the history of economics.
Businesses need credit to thrive. And Peer-to-Peer finance is another gateway to allow businesses the health that a strong line of credit provides.
PeerBerry might prove to be the most reasonable avenue to pursue if you're interested in business loans. The return is strong, the team professional and their track record is unbeatable.