Invest or finance without bank through p2p loans


Loans to private companies by bypassing the bank

Loans to private companies by bypassing the bank

If you have a business idea and it seems that you can not get the funds from a bank, there are quite a few alternatives you can try. Currently not only sites (P2P) traditional peer-to-peer lending sites are available, but now some sites are being transformed into something new called “crowdfunding”.

Basic concepts of P2P loans

Basic concepts of P2P loans

Let’s go back and start with the basics. P2P loans is a way to exclude banks out of the equation. This allows people to go online to borrow directly from each other. For example we have Prosper, Comunitae, Lendico is that it is one of the leading companies in this field. 

This is how P2P loans work for a potential borrower: You commit to a credit check and reveal your status between debts and income. Based on that information, it is assigned what amounts to a credit risk score. Taking into account that the score is assigned a letter of qualification (from AA to E) and an APR according to the credit risk that you pose to potential lenders.

P2P lenders protect their interests by buying multiple small loans, rather than pouring everything into a large loan. In this way if any borrower fails to pay, a lender only loses a fraction of their money, not the entire amount.

At first P2P loans did not set sufficiently high standards on who could borrow and did not adequately communicate to investors (lenders) about the level of risk involved. So the business model did not work. Now things have changed, standards have become more refined and more sophisticated.

It has reached the point where Prosper claims that the average profitability obtained by lenders after expenses, approximately 10%.

The P2P model evolves with crowdfunding

The P2P model evolves with crowdfunding

Now, the basic idea of ​​P2P loans is undergoing a change. In the United States have come to light new that do what is called crowdfunding. With crowdfunding, a borrower only receives the money if enough people agree to put small amounts of investment. If you do not get 100% of the funding for a potential project, you will not get any money at all.

One of the most prominent crowdfunding sites is Pilesennkick. Although someone could lend money in a traditional P2P site and earn a good return on investment, this is typically not the motivation for people who make money loans on a site like Pilesennkick. The Pilesennkick user does more than anything to help entrepreneurs and entrepreneurs when they have a creative business idea.

There are reports claiming that just under half of all ideas on Pilesennkick get funding and so far since its launch on April 28, 2009 $ 1.5 billion have been pledged by more than 8 million people, have funded more than 80,000 creative projects.

Another crowdfunding site is Bofoa, which allows people to finance loans to entrepreneurs in increments of $ 25 or more. Once again, people do not do it to earn interest. All they do is help entrepreneurs start, and it is assumed that more than half a million people have received money from Kiva, which claims a 99% reimbursement rate.

MicroPlace.com is a similar site where you can support entrepreneurs from around the world, for example people can be financed in Spain, Colombia, Chile, Ecuador, Mexico, Dominican Republic, Peru, Panama, Argentina, Ecuador, Uruguay, Paraguay , Guatemala, El Salvador, etc. But unlike Kiva, it actually earns something of nominal interest from your investment. MicroPlace claims a 98% refund rate. Another popular site is Idianors

If you have a business idea and the bank has no interest in you or your idea, try these options. There may be money out there to make your idea come alive.

A one-stop shop for online merchants and entrepreneurs

A one-stop shop for online merchants and entrepreneurs

If you are specifically a merchant who works online, there is a new beginning that is in the business of making loans only for e-sellers like you. They are not interested in brick-and-mortar loans from traditional operations, they only lend to online merchants.

With a new site called Vegeloan, the application process is so agile and simple, within 10 minutes after completing the application online, you could have the money in your bank account! Kabbage that evaluates based on the observation of what he is doing in his online business, transaction history, user regeneration degrees and even game and participation in social media.

You make the request and, if approved, the money is issued through PayPal in a matter of minutes. One caveat, though: The interest rate for Vegeloan loans ranges between 10 and 18 percent.

Again, this is another option to get money for your business at a time when banks refuse to help you.