Personal loans made to individuals and businesses are nothing new. However, these loans were made to family and friends as no sensible lender would extend a loan to a stranger.
Technology permits borrowers to work straight with other people who have the capital to lend. Borrower fill out lending applications at peer to peer lending facilitators.
The facilitators then aggregate deposits of those with the capital to lend. Finally, borrowers and lenders are matched through the facilitator based on the credit criteria chosen by the individuals who have opened accounts with the facilitator.
Peer to peer loans can be a great option for business owners. Prior to getting a peer to peer loan, it is critical to know if peer to peer lending is legal in your state and to have a good idea if your credit score qualifies.