Summary of Peer-to-Peer Lending to Small Businesses
Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs
Federal Reserve Board, 2014
Technology may upend small businesses’ dependence on banks.
Many small businesses find it difficult to get bank loans, and entrepreneurs and start-ups often don’t qualify for traditional forms of financing. Once the smallest firms exhaust the resources of family and friends, their only recourse may be the local payday lender or loan shark. But the time may be ripe for technology to upend small businesses’ dependence on banks. Peer-to-peer (P2P) loan websites have made inroads into consumer lending, and dedicated business lending sites are starting to debut. getAbstract recommends this first-of-its-kind investigation into small-business P2P lending to entrepreneurs, investors, small-business owners and commercial bankers.
In this summary, you will learn
- How small businesses use peer-to-peer (P2P) lending,
- What recent data show about the costs and delinquency rates of these loans, and
- Why P2P lending sites for small businesses are multiplying.
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