Loans for SMEs, advantages of doing it through P2P lending

Loans for SMEs are very difficult to obtain through traditional banking, it is much faster and easier to obtain through P2P lending and in this article we will see what are the advantages of requesting a loan through P2P lending.

First we will define what a loan is and to define it we will say that a loan is a contract between two parties through which the lender gives the borrower a certain amount of money and the second promises to return it to the first within a certain period of time (amortization period) and with commissions and interests, previously agreed, that represent the price to be paid for the loan granted.

Why do SMEs usually apply for loans and what types of loans exist?

SMEs usually request loans to finance expansion investment projects or projects of purchases of goods and services for consumption or exploitation. What usually happens is that at the time of carrying out this project the SME does not usually have all the money necessary to be able to do it and it is for this reason that usually resort to request a loan to a traditional credit institution or a platform of P2P lending to be able to finance said project.

Depending on the guarantee required, we can distinguish between loans with mortgage guarantee and loans with personal guarantee. P2P lending companies can not request mortgage guarantees on the property of the developer, because the new law prohibits it, but traditional banks can do so. Personal loans tend to be more expensive and are usually granted to SMEs if they are guaranteed by the remuneration of the individual of the company’s manager and by their present and future assets, otherwise they do not give a single euro. The loans with mortgage guarantee have a cheaper interest rate, but they are very cumbersome and expensive to set up (study commission, opening commission, writing expenses, registration fees in the Land Registry, etc.) but they can be grant very long term (10,20 or 30 years) because in case of default, the entity would keep the mortgaged property and sell it in public auction to be able to collect what is owed.

Loans for the acquisition of vehicles: now P2P lending companies have also launched to collect private savings to finance the purchase of cars in bulk, for this the SME only have to register in a P2P lending company and request the desired financing If the applicant passes the appropriate filters his request will be published and in a very short time he will obtain the necessary resources to formalize a personal loan with the P2P lending company at interesting interest rates and repayment terms.

Loans for reforms or expansion projects: Now SMEs can apply for a loan for their expansion project or to reform their facilities through P2P lending, investors love this type of project because they represent a greater value of the SME and this supposes for them an additional guarantee when it comes to ensuring the return of the investment in case of non-payment.

Loans to finance working capital: If the SME is short of stocks and needs to buy more products, if you have many outstanding customers and need cash to finance them or if you simply want to have a better cash flow, you can always request a loan to finance circulating through P2P lending for these things.

Loans for the reunification of debts: If the SME has many small debts that consume too much cash, you can always try to redirect everything by requesting financing for the reunification of debts through P2P lending. There were already companies for the reunification of debts, but these are usually commission agents of dubious reputation who only seek to intermediate, mortgage, charge their commission and goodbye very good.

Requesting your financing for the reunification of debts through P2P lending you will get a secure financing in an easy and fast way, in addition the P2P lending company will be in charge of publicizing your financing request in your platform and in an agile way in a short time the SME will be able to dispose of the money necessary to reunify all your debts into one and thus will pay a final fee much lower than the sum of all the previous ones.

Advantages of applying for loans through P2P lending.

The advantages of applying for loans through P2P lending are:

  • A saving of time and financial costs. Financing by P2P lending has the advantage of being cheaper than traditional financing, nowadays bank loans with double-digit interest rates are closing, while by P2P lending, if the company is solvent, it can already find financing for a moderate 4 or 5% and for companies with low or moderate risk, financing can be found by an average of 7 or 8% per year. P2P lending companies do not charge anything for the solvency study, nor for advertising the request of the SME in their Marketplace and do not charge anything for early repayment and, finally, do not force you to hire other financial products to grant financing, such as if they tend to do almost all traditional credit entities.
  • Greater speed in the processing and granting of the loan: The most complicated is the solvency analysis phase of the SME that requests financing, but if it passes without problems, the rest is very simple: the financing request is advertised in the Marketplace and when the investors have subscribed 100%, the P2P lending company takes care of everything else: to transfer the money to the SME, to sign the loan contract and to collect the fees.
  • Greater flexibility in the amortization period and in the amount of the loan: Both the amount of the loan and the repayment term are fixed by the promoter requesting financing, the P2P lending company can advise you on what is best for the SME, but it is this, ultimately, who has the final decision on these elements.


Elena Baker