What is peer to peer lending for startups?Peer to peer lending is a relatively new way to access finance, facilitated by websites such as Zopa. It allows members of the general public to invest their money into these loans, acting as a brokerage (much in the same way that Betfair adapted the traditional bookmakers model by allowing customers to bet for and lay against each side). The broker will typically take a lending fee, which is deducted from the interest rate charged by the lender to the business.
This is a funding avenue that is open to most individuals with a good credit history, and this market is developing at a rapid rate. As it is a new approach, there haven’t been too many horror stories in the press about peer to peer lending, however this might change as the market develops.