This fall, Lending Loop, a new peer-to-peer lender for small business loans opened its cyber doors for business. Though not the first peer-to-peer lender in Canada, though that is what they claim on its blog, it is the first peer-to-peer lender that allows the average Canadian to invest in small business loans. Up to this point, the Canadian regulatory systems have forced other p2p lenders to open it platforms only to accredited investors and institutional investors.
So through Lending Loop the average Canadian can invest in small business loans. Once an account is open and funded, the investor can review loans that have been vetted by Lending Loop and placed into their risk categories. An investor can pledge a minimum of $50 to any one loan and is not permitted to fund 100% of a loan. It is highly recommended that the investors spread their investments among many loans to average out the risk of any individual business. Note Lending Loop charges a 1.5% annual fee to the investors.
For small business owners, it is another alternative to the banks. Depending on the assessed risk of the business and the length of time the money is needed, the interest rate varies from a low of 6% to 15.5% and their lender’s fee varies from 3.5% to 5.5%. You can borrow up to $500,000 but your business must be in existence for 2 years or more and have annual revenue of $200,000 plus.
You can get more details by visiting their website: https://www.lendingloop.ca/