Issue Brief Examines Peer-to-peer Lending Model

The Office of Advocacy has released a new issue brief entitled Peer-to-Peer Lending: A Financing Alternative for Small Businesses. Peer-to-peer lending (P2P) is an alternative funding model in which individual investors provide small sums as personal loans to individuals via Internet platforms. In this brief, Research Economist Miriam Segal builds upon existing research and discusses the emerging funding option by explaining the investment model, comparing it to traditional small business financing options, and presenting implications regarding the future of peer-to-peer lending. While the brief outlines scholarly research on various sources of capital, this report also gives the research economist, the potential investor, and the small business owner, the most up-to-date information on different opportunities for accessing capital in today’s economy. The complete issue brief can be accessed on Advocacy’s website here.



1 Comment
  1. Rick Nischalke says

    Thanks for your efforts to raise awareness about peer to peer opportunities to access working capital for small businesses! Access to business funding has been severely restricted due to market conditions and a tightening of credit by traditional lending institutions over the past decade.

    The small business marketplace is faced with greater competition and lower profit margins, while simultaneously incurring decreased access to the working capital that it so desperately needs.

    I work with a firm that meets the need for business capital in the marketplace across the United States. Most of our clients have already exhausted their efforts with traditional lenders such as banks and credit unions before seeking our assistance.

    In some cases, having access to a working capital loan allows a business owner to take advantage of a discounted buying opportunity for inventory or equipment needed to grow or maintain their business. Often times a business simply needs a short term capital infusion to meet its overhead obligations until their receivables come in. And in many cases, the business can gain access to needed working capital without putting up collateral and can be approved for a loan in a matter of days. Traditional lenders can take weeks or months to issue an approval and offer of funds (if one ever comes).

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