Of late Peer-2-Peer funding has started picking up. It is also known as P2P funding or P2P lending. Generally, it is one to one lending meaning one person lends to one person. But it is not necessary partularly when the lending is done for business purposes. This is similar to crowdfunding, but in a limited way.
How Peer-2-Peer Funding is Different?
Peer-2-Peer Funding is a platform where the Borrowers and Lenders interact online, among themselves to decide a mutually agreeable terms of their loan requirement etc. This not only speeds up the process of completing the transaction but also gives necessary satisfaction that they got the terms they wanted. Web portals are available where both borrowers and the lenders can register themselves and upload their requirements. Both the borrower and lender can examine the details of each other and may decide to interact with each other using that platform. The portal provider works like a middle man, but the negotiations are directly between the borrower and the lender. It works like a win-win situation for both of them, because the lender gets the best return on his capital and the borrower get the best interest rates. The service provider is supposed to conduct the background checking of all the registered users, for which they get the service charges.
Typical characteristics of peer-to-peer lending are: