Peer to Peer Lending

As I have written in previous posts I take a keen interest in the peer to peer sector, particularly those facilitating loans to businesses.

Often it seems the platform demonstrate a far greater grasp of technology than they do with credit policy and it seems ( as at Christmas 2020) another P2P platform is heading towards an insolvency process.

Again, to state the obvious, if a platform is offering returns of 10% + then please apply the greatest possible scrutiny to the borrower. If a lender (investor) is being offered 10% return it means the borrower will be paying in the region of 12%; at the moment money to SME’s is cheap, even if not being sourced via any of the Governments Coronavirus initiatives.

Therefore you have to ask why a viable business would go via the P2P route when conventional money is available, if that question cannot be answered satisfactorily then money should not be ‘invested’ across P2P platforms.

Conventional funders, including the invoice and asset financiers are very much open for business.