Banking 2.0: Peer-to-peer Financing Options Gain Momentum

If you need any proof that a recession is in full effect, just ask the small business owners out there who are trying to get a loan. The loose lending practices of traditional banks and programs have forced them to scrutinize every potential lending scenario. Rejection is not uncommon. On the flip side, alternative lenders are seeing surge of business. And that means new categories of funding options to help you get your company off of the ground.


The Credit Crunch: Banks Tightening Their Belts
Unless you have outstanding credit and plenty of collateral, you’ll find that traditional banks and lenders are more hesitant to give you a small business loan than ever. After a decade of granting loans on stated income, it seems as though banks are trying to ‘right the ship’ by dissecting every loan application and looking for a reason not to finance. And that’s downright tough on those with the dream of business ownership.


Welcome to Lending 2.0
The upside to this situation is the growth of alternative small business funding sites that cater to those at every stage of the business process: start-up, brand establishment and expansion. Entrepreneur reports lists these popular online lenders and their average business loan amounts:

• Prosper.com - $90,000
  
• Lending Club - $15,000
  
• Virgin Money - $21,000
  

Most loans requests can be completed online, saving you a great deal of time and effort. Plus, if your business has special needs, lenders will typically connect you to an account manager that can personalize a loan to fit your needs.