B2B lending is similar to Peer-to-peer lending but aimed for businesses. It enables Small and Midsize Enterprise (SME) to receive the necessary funding for growth directly from a set of online investors both individual and institutional.
The main advantage of B2B lending is flexibility. Businesses can pick a term, maturity date, and prepayment requirements. You’re able to shop around and compare your options against the market rate, providing more value than the banks. For loans under $500,000, large financial institutions don’t want to deal with creating flexible payment terms. Instead, they’d prefer to sell their financial services as a product. With B2B, you’re able to build a financial service that works for you.
P2P lending industry proved to the world that alternative financing models could work. In China, P2P lending grew from $30 million in 2009 to $7.8 Billion today. But it’s not the industry’s explosive growth that is truly revolutionary.
The truth is, it’s the concept of peer to peer lending that changes the game. Something experimental was proven. In today’s modern economy, B2B lending companies are able to apply these strategies to offer unique financing options that can change the way you do business. In the business environment, a dollar can go much further. This means that B2B lending could very way to change the economic landscape.
Examples of the Best B2B Lending Companies
The Best Lender to Improve Working Capital, With the objective of shortening the time frame between invoice and payment, C2FO aims to improve the efficiency of supplier and buyer relationships. Their business model is appealing to both suppliers and investment companies, improving returns for both by cutting out the middleman.
Their service is appealing for business who invest in outstanding invoices. This platform allows them to hand-select companies whose payment terms work with their needs, improving their revenue. The end result is a dynamic marketplace that offers businesses competitive rates compared to traditional institutions and offers to finance for companies that would traditionally be unable to secure financing.
It is the Best Lender for a Line of Credit. For any small or medium sized business, a line of credit is the lifeline your company needs. so, best used for managing variable expenses, this type of financing is best used for preemptively getting access to capital that you may not yet need.
Kabbage is able to offer loans to businesses that can’t qualify through traditional lenders, and offer reduced rates to financially stable companies. They review thousands of data points across your business to create a fair risk assessment and have attracted financing from lenders who want to reduce their risk.
The Best Lender for Small and New Businesses. Funding Circle was started to give new companies around the world to initial capital. Their platform is considered as the gap between venture capital firms and small lenders. Instead of connecting you with existing finance, they’re partnered with several capital firms to performs their investments in a more traditional form.
The Best Lender for Socially Conscious Business. On paper, Street Shares seems like your average lender. They offer term loans and lines of credit up to $100,000, as well as contract financing up to $500,000. But they’ve partnered with lenders enabling them to offer better rates to socially conscious businesses.