Financing can be tricky to secure for startups. Traditional bank loans may require several years of operation, high minimum annual turnover, or more credit history than a startup can present. Not every peer to peer ecommerce option is ideal for this kind of company, but some are uniquely organized to provide loans specifically to this type of business. The minimum requirements for startups that are likely to be found are: to be 18 or older, to have been in operation for at least 12 months, to have the legal right to remain in the UK for the duration of your loan term. Here are three of the best P2P/B2B financing options available to new businesses.
Loan Types: P2P LendingAvailability: UK (Only Established, Profitable, Businesses)Securities: SecuredLoan amount: £50,0000 – £3,000,000Interest: Representative APR: 6.41% to 16.86%Overall Rating: Good 3.0 / 5.0 About Thin Cats Founded in 2011, ThinCats was established to meet the borrowing needs of businesses following banks’ withdrawal after the financial crisis of 2008. Their business doubled twice annually during its first two years of operation, and the company quickly built a reputation for a very high quality standard for the P2P loan process. Using a
LendingClub Review in Numbers: 2020 Updated 💰 Loan Amount $5,000 to $500,000 💸 Loan Term 1 to 5 years ⛔ Unsecured? Unsecured for loans/lines under $100,000 ⌚ Requirements At least 12 months in business Minimum of $50,000 annual revenue No recent bankruptcies or tax liens Own at least 20% of the business and have at least fair personal credit ⭐ Client Reviews 98% 🌐 Website: Lendingclub.com 🌝 Easy to Apply: Yes 📃 Required: Estimated credit score (minimum of 640) Annual
Loan Types: P2P Lending Availability: UK Securities: Unsecured Loan amount: £1,000 – £25,000 Interest: 7.2% to 16.7% Overall Rating: Experienced 4.1 / 5.0 About Zopa Founded way back in 2005, Zopa was ostensibly the UK’s first P2P lender. Today, the company is among the world’s largest. Based in London, Zopa is backed by Benchmark and Wellington Partners. It is that rarest of P2P lenders: a company available to people without lots of money, that doesn’t have sky-high rates and dubious
Funding Review in Numbers: 2020 Updated 💰 Loan Amount $10,000 – $500,000 💸 Loan Term 6 months to 5 years ⛔ Unsecured? Secured ⌚ Requirements Needs to be a small business Have been trading for at least three years At least $400,000 in annual revenue The business has a good and clean credit history 680 FICO for personal Guarantor Positive book value (assets > liabilities) ⭐ Client Reviews 88% 🌐 Website: FundingCircle.com 🌝 Easy to Apply: Yes 📃 Required: Filling-in
What Advantages do Secured Loans Offer to New Startups?
As you can see from the three companies listed above, it can be difficult for a brand new company, with little history, to acquire unsecured funding. For this reason, Secured loans may be an excellent option for dedicated new traders. P2P lenders like Funding Circle offer secured business loans in the forms of: asset finance, property finance, and secured loans.
Security can range from a personal guarantee to the use of the asset purchased or all business assets as collateral. Because lenders have little business behavior on which to predict creditworthiness when it comes to startups, secured loans may be the easiest form of financing for these to secure.
What about the UK’s Government Loans Startup Programme?
If you are looking for a regional small business or startup grant read our comprehensive guide.
Also, the UK Government’s Startup Loan Scheme (Startup co uk) provides loans of ₤1,000 to ₤25,000 to 18+ year old persons living in the UK. The average loan awarded is ₤4,000, and is paid off at 6% interest over 5 years. Startups, here, include businesses that have existed for less than one year, though this is extended to two years in some circumstances.
Approved businesses also receive business mentoring as part of the programme. The application is simple and performed online, with a reply received in 3 business days. Though the government does not publish the percentage of applicants who receive funding, the programme has been extended to tens of thousands of businesses and sole proprietors.