Small Business Loan
Published by Bob Foster
A small business loan is difficult to come by in today’s climate of scarce bank financing. That means that businesses must resort to other forms of money acquisitions (along with parsimonious spending).
Some small businesses can go back again to family and friends, while others may get additional help from their outside investors. Businesses are also getting creative regarding financing by acquiring loans from vendors, employees, customers, communities, etc.
But one place for getting a small business loan that many smaller businesses are not aware of is Peer-to-Peer Lending—obtaining a loan from your peers. Peer-to-peer lending brings anonymous people together…lenders and borrowers…electronically in a double-blind auction through technology similar to the type eBay uses.
All indications are that this type of lending is growing in popularity and has helped many businesses cope with the shortage of money from banks.
Peer-to-peer loans are usually small in size—currently around $25,000 maximum—but they have been much higher in the past and will likely increase again as the economy improves.
It is also necessary to have a fairly good credit rating to get an acceptable interest rate, which can run from 6% to 35%. Some lenders have minimum credit scores, while others apparently do not.
Here are some of the more popular peer-to-peer lending sites;
Us.zopa.com (UK headquartered)
If you’re looking for a small business loan to finance the acquisition of a piece of equipment. or a special project, peer-to-peer lending might just work for you.
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