P2P Lending Platforms Transforming Traditional Practices

A number of individuals and businesses all around the world have struggled to get funding from traditional lenders since the global economic and financial crisis in the year 2008.

In Europe, the struggle in acquiring new funding has been prolonged due to the instability among the contributing member states in the Eurozone.

Because of this continuing financing limitation, individuals and businesses looked for other ways in finding alternative funding sources.

Consequently, new financing models have been created to fill this market niche and new providers have entered the market with platforms that matches investors and borrowers.

P2P lending platforms help individuals and businesses (small to medium-sized enterprises), which are incapable of acquiring funds from traditional lenders, to get the funding that they need from a group of investors.

This so-called peer-to-peer or marketplace lending model is increasing in popularity with borrowers because of its perceived interest rates, easy application procedure, and instant lending decisions.

P2P platforms seem to have found a niche by offering borrowers an enhanced lending experience, which is the main reason they are rapidly gaining momentum.

P2P Lending Platforms Transforming Traditional Practices

The lower cost-structure associated with online organizations makes the potential for P2P platforms to offer borrowers attractive rates.

Borrowers are gaining benefits from growing cash pool becoming available via P2P lending platforms and getting far lower interest rates than what is being offered by traditional lending institutions.

Tristan Hugo-Webb, Associate Director of Global Payments Advisory Service at Mercator Advisory Group, emphasized in his statement that P2P lending platforms are not a competitive threat to traditional financial institutions.

He added: “However, the emergence of P2P lending is a valuable new source of financing in the post-2008 global economic and financial world and has the potential to close the ‘credit gap’ in mature and developing markets and allow consumers and businesses to obtain financing that can benefit the overall economy.”

At Stratosphere, we take the same view and see there is a market and room for all types of valuable and sensible forms of lending for businesses wishing to raise finance.

If you would like to know more about us, our model and current deals, please browse through this website and then use one of contact us forms and get in contact with us with your enquiry (or questions).