Best p2p business loan investments


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We receive no direct payments from the mentioned companies. Some links on this page are affiliate links, at no extra cost to you, we may receive commissions when you use them. However, we try our best to keep our articles fair and balanced.


   

Best p2p lending businesses

P2p business loans are different from p2p real estate investing and p2p personal loans because the recipient of the money is businesses rather than individuals. This means that the companies need to keep earning a profit in order for them to pay back the loans.  The business offers different types of guarantees, sometimes it is property, other times it is stock or personal guarantees from the directors. 

The reason for businesses to get loans is business expansions, selling invoices, cash flow reasons, working capital, to pay tax bills or r & d. The interesting thing with business loans is that higher risk is higher returns.

Here are some potential p2p investments in Business loans

October

October is focused on France, Spain, Italy and The Netherlands, their core business is small loans to medium size companies. 

Pros

  • It is attractive to borrowers because it has a good loan range: €30k to €5m, rates start as low as 2.5% p.a, there is no personal guarantee the eligibility check is instant. The good thing about these conditions is that it attracts borrowers.
  • It offers investments across several European countries, good for diversification.
  • You can start investing with only 20 Euros, this is a great way to test the waters and learn more about business p2p investing

Cons

  • The average interest rate for lenders seems to be around 6%.

Envestio

Is a popular p2p business lending platform. They have a fast deal flow and investors tend to invest in loans very quickly. They are based in Estonia, a country member of the European Union. 

Pros

  • Over 22 million loans have been funded through the platform and more than 11,000 investors using the platform, a lot of investors are trusting  Envestio with their money. This figure may be a testament to the intelligence of the crowd.
  • Envestio has paid out more than 1.5 million in interest, proof that their system works and they have the capability to choose good loans.
  • Auto invest is not available. You need to login and invest in each loan manually.
  • There is a varied mix of business loans offered on Envestio, these include materials mining, wholesale, biomass, fashion, import, crypto mining, real estate, construction all from different industries. This gives you the opportunity to diversify within many loan types industry types and geographically.

 Cons

  •  The capital is guaranteed only up to 90% of the capital invested.
  • There is no secondary market.
  • The loans offer a high return because they are High risk.
  • When you sign up through this link within 180 days, you should get a 5 Euro reward and a 0.5% return.
  • Eneveistoi is a very new company, which means that their business model has not yet seen the full spectrum of the economic cycle.
  • They have a relatively low number of investors compared to others such as Mintos, however, once they do have a lot of investors probably their interest rates will go lower. This is what is happening on Mintos there’s more demand than supply for loans
  • Secured debt has collateral coverage of between 80% to 90% subordinated have no coverage, except legal recourse.
  • On their website there is an “ECN Supporting member badge”, to get there is a fee of 450 Euros. However, people might mistakenly think it is some kind of standard attained through business excellency, not payment.

Kuetzal

Kuetzal is a p2p business lending platform based in Estonia, launched in 2018. 

Pros 

Possibility to invest in real estate development projects

  • Has an interesting mix of loans from crypto mining to real estate development projects.
  • Interest rates up to 21%, the compounding effect on such an interest rate are astounding. Investing 3k for 15 years at 21% compounded with no losses will result in 52k returns!
  • The minimum investment is only 100 euros, which allows new p2p investors to test and learn the Kuetzal platform with a relatively low amount.
  • With the system of Kuetzal care, one can earn interest before the loan is funded.
  • Buyback guarantee system will buy back loans after 2 months of non-payment, which protects investors from losses.
  • Loans average from 12 to 24 months

Cons

  • The team seems to be very young, on the plus side this typically means a lot of energy and enthusiasm but if I may apply a stereotype it means lack of experience and risk-prone decisions.
  • There is no auto-invest option, which means investors need to sacrifice their time to long and invest
  • Launched in November 2018 so it does not even have one year of operations, no long term track record of repaid loans and a good loan evaluation loan model.
  • The interest rates are high because the projects are high risk.
  • Kuetzal Care program: All projects listed will be funded either through investors or out of Kuetzal own pockets. This could leave Kuetzal short of cash or overexposed to risky projects.
  • There is no secondary market, but in some cases, you can sell your investment back to Kuetzal for a 10% haircut.
  • If you sign up with this link you may receive 15 bonus and 0.15% cashback in the first 180 days after sign up.

Flender

Flender is a business p2p lender, it is founded in 2014, based in Ireland and focuses on Irish SMEs.

Pros

  • Historically, ROI on Flender loans has been around 10%
  • Default rates have been around 0.7%, this is very low compared to the industry standard
  • The checks on the borrowers include: Affordability checks, Creditworthiness checks and Identity checks
  • A diverse range of business, not all focused on the same industry makes it easier to diversify.
  • Flender is its own loan originator, their brand is at stake when the choose a loan. Platforms with multiple loan originators might be less concerned with the loans they publish on their platform. 
  • The investors pay no fees to invest on Flender.
  • The minimum investment is only 50
  • The loan size ranges from 10k to 100k which makes estimates easier and potential sales of collateral faster.
  • Autolend available.
  • Most Flender loan applications are not accepted, the platform is focusing on quality.
  • Loans are graded, giving investors an idea of the risk in each loan.

Cons

  • No Buyback guarantee
  • No Secondary market.
  • Low deal flow, less than five a month.
  • Only focused on Ireland
  • Not suitable for short term investors as loans tend to be around 36 months and there is no secondary market.

Mintos

Mintos is the big boy of p2p lending in Europe, It has the highest volume of loans and loan originators. It has all sorts of loans including business loans. Mintos has several loan originators which offer p2p business loans.

Pros

  • Very flexible auto-invest options, including three standard portfolios.
  • One of the largest platform with the highest number of loan type diversity.
  • Many loan originators giving investors a huge spectrum of risks and rewards.
  • Grading of loans by risk
  • Highly liquid secondary market

Cons

  • Eurocent a Mintos loan originator, had its loans suspended from Mintos.
  • Mintos has had several loan providers which defaulted or temporarily stopped payments in recent months.
  • Not all loan originators pay interest when a loan has defaulted, some of them earn interest but do not share it with the lenders
  • Many loan originators and focused on getting more, as an investor you need to focus on quality rather than quantity. 
  • There is a certain level of sophistication needed to discern all the options on Minots, there is simply a lot of loans and a lot of loan originators. Not all of these are of the highest quality.
  • The interest rates have been going lower, and this means returns are lower and the auto-invest options need to keep being adjusted lower to avoid cash drag.

Grupeer

Grupper is based in Latvia and has been online since 2017. It operates a p2p marketplace, just like Mintos does. The main differences are that it has fewer loan originators and has a focus on real estate and business loans.

Pros

  • Interest rates are around 13%, remember high returns mean high risk
  • Auto invest functionality is available.
  • The loans have a diverse geographical spread including countries such as Norway and Russia. This allows investors to diversify outside the EU. Learn more Investing in the Ruble. LINK
  • You can start investing with just 10 Euros
  • Buyback guarantee available if payments are delayed for 60 days.
  • Over 53 million loans have been funded and over 14,000 use the platform.
  • No loan originators have defaulted or stopped payments on this platform since launch.
  • Frequent cashback campaigns.
  • No deduction of Taxes, you need to do this yourself.

 Cons 

  • Grupeer does not yet have a secondary market.
  • There is no early exit option available.
  • Gruppers interest rates have been declining.
  • The reporting on Grupeer can be improved.
  • It is not possible to sort the loans listed b clicking on the column’s title, on the other hand, they have a good filtering tool on top of the list.

IUVO

Pros

  • ROI varies between 5% to 15% APR, on average loans return 9.2%;
  • Investments available in Eur, Bulgarian Lev (BGN) and  Romanian Leu (RON).
  • Open to American investors.
  • Loan originators need to invest and keep 30% in each loan the published.
  • A good mix of long and short-term loans. Short term loans give you more liquidity and longer-term ones longer stability.
  • Compound interest: With the auto-invest tool it is easy to earn interest on your interest. 
  • Borrowers need to pay late fee payments; which are shared with the investors.
  • Super Customer Support, they call you back once you create an account.

Cons

  • Only the principle is covered by the buyback guarantee and not the interest
  • Investors need to pay 1% of the loan amount when using the secondary market.

Crowdestor

Launched in 2018, and between inception and Oct 2019 had zero defaults.  They are based in Riga, Latvia. A country member of the EU.

Pros

  • The interest rate on their loans is anywhere between 12% and 20%.
  • You can start investing with as low as €50.
  • Good deal flow, with deals coming infrequently, making it easier to diversify and reduces cash drag (idle cash)

Cons

  • There is no way to invest automatically, no auto-invest system.
  • They have a buyback guarantee, but it does not work on the full amount of the loan.
  • Once invested, it is not possible to sell the loan as they have no secondary market.
  • There is no rating for the loans issued on the platform, thus investors need to check each loan in detail to validate if it is compatible with the appetite of their risk.

Not investment or financial advice. This is not an endorsement or recommendation to buy, sell or hold.  The staff of this site may own the asset/s mentioned on this page. Investing is risky and you may lose all your capital. Do your own research. See full disclaimer.

We receive no direct payments from the mentioned companies. Some links on this page are affiliate links, at no extra cost to you, we may receive commissions when you use them. However, we try our best to keep our articles fair and balanced.


   

Author: Jim Reynolds
Jim Reynolds. Is passionate about finance, passive income and cryptocurrencies. He writes about his passions on NodesOfValue.com. He has worked in the tech and financial industry for a few decades. He holds a masters in business admin and a bachelors in IT. All his writings are not investment advice.


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