6 Best Peer-to-Peer Business Lending Options 2019

A peer-to-peer (P2P) business loan is a financing product where the funding comes from a group of investors rather than a traditional lender. Peer-to-peer business lending is often easier to qualify for and offers lower interest rates than financing through traditional lenders. P2P business loans fund businesses that may not be able to get funding elsewhere.

Top 6 Peer-to-Peer Business Loans 2019

*Last Updated: July 2019

How We Evaluated Peer-to-Peer Business Lending Options

When evaluating the best peer-to-peer lending for borrowers, our primary focus was on the qualifications needed to obtain financing like credit score and annual revenues. We compared each lender based on how much they could lend, how much the funding would cost you, what it takes to qualify, and the diversity of their financing options.

The criteria we used to evaluate the best peer-to-peer lenders include:

• Rates & fees: The interest rates on the loans given, and any additional fees charged by the lender
• Loan amount: The minimum and maximum loan amounts that the lender can lend
• Loan terms: The length of time you are given to repay the loan
• Qualification requirements: The minimum credit score required, the amount of annual revenue, and the amount of time that your business needs to have been operational to qualify for a loan
• Financing products offered: Some of the providers on our list offer only one type of financing product, while others allow for greater financing flexibility by offering multiple financing products.

Based on this evaluation criteria, we have selected StreetShares as the best peer-to-peer lender for small businesses. StreetShares offers short term loans, lines of credit, and contract financing. Of the lenders that we reviewed, StreetShares has the least restrictive qualifications, and rates competitive with the other lenders we reviewed.

What a Peer-to-Peer Business Loan Is

A peer-to-peer business loan is funded by investors rather than a single lender. The P2P lender acts as an intermediary between the investors and the borrower; matching loan requests with the investors’ funds. In return for their investment, the investors receive the interest that you pay on the loan, less a fee to the lender.

How Peer-to-Peer Business Lending Works

With P2P lending borrowers and investors are matched up via a lending platform, this lending platform is what the borrower sees as the “lender.” Investors select which loans they want to fund, and the lender handles the loan details. As the loan is repaid, the investor receives their contribution, plus interest, back from the lender.

As a borrower, a peer-to-peer business loan appears to operate the same way a more traditional loan would. You apply through a lender who processes your application, underwrites the loan, and collects your payments after the loan is made.

Based on our evaluation, the following are the six best peer-to-peer business loans.

StreetShares: Best Overall Peer-to-Peer Loans for Small Businesses

Of the peer-to-peer lenders that we reviewed, StreetShares has the most flexible minimum qualification requirements, making them a great provider of short-term loans and lines of credit for businesses seeking up to $250,000. If your business has one year of business operations, with $25,000 or more in revenue, and a credit score of at least 600 you may qualify.

StreetShares Rates and Fees

Peer-to-peer small business loans and lines of credit from StreetShares have an annual percentage rate (APR) ranging from 7.19% to 29.9%. Additionally, StreetShares charges a loan origination fee between 2.95% and 4.95% of the loan amount. Additionally, StreetShares’ contract financing starts at rates as low as 1% per month.

The rates and fees for peer-to-peer business loans from StreetShares are:

• Expected APR: 7.19% to 29.9%, starting at 1% for contract financing
• Origination fee: 2.95% to 4.95%
• Prepayment penalty: None

StreetShares offers the lowest APR range of any of the peer-to-peer business lenders that we reviewed, with the exception of Prosper who has a lower starting APR. However, Prosper is not truly a business lender, and its maximum funding amount of $40,000 is far less than StreetShares at $250,000.

StreetShares Loan Terms

StreetShares offers peer-to-peer small business loans ranging between $2,000 and $250,000, and small business lines of credit from $5,000 to $250,000. Its repayment terms for these loans range from three months to three years. Additionally, StreetShares offers contract financing with a 90% advance rate on your business-to-business (B2B) and business-to-government (B2G) contract invoices.

The loan terms for peer-to-peer business loans from StreetShares are:

• Loan amount: $5,000 to $250,000; no limit for contract financing
• Loan term: Three months to three years
• Repayment schedule: Weekly

StreetShares maximum loan amount falls in the mid-range of the providers we reviewed. Both Prosper and Upstart have significantly lower lending limits than StreetShares. When comparing StreetShares to Funding Circle vs Lending Club, Lending Club can lend up to $300,000 and Funding Circle can lend up to $500,000.

StreetShares Loan Qualifications

StreetShares has very lenient minimum qualification requirements for its loans, which makes it a good fit for most small business borrowers. To qualify, it requires that your business has been operational for at least one year, that you are generating at least $25,000 in annual revenues, and that you have a minimum credit score of 600.

The minimum qualification requirements for a loan from StreetShares are:

• Time in business: One year
• Credit score: 600 (check your score for free)
• Gross annual revenues: $25,000

StreetShares has the most flexible minimum requirements of any of the peer-to-peer business lenders we reviewed. This suggests that it is willing to lend to businesses of many different sizes and in many different stages of their growth. This is one of the reasons we recommend the lender for P2P business loans of less than $100,000.

Additional Requirements for StreetShares

The documents you will need to gather to apply for a loan from StreetShares are:

• Business tax returns: One year (most recent)
• Personal tax returns: One year (most recent)
• Business bank statements: Last six months

What StreetShares Is Missing

While StreetShares is our recommended peer-to-peer lender overall, it may not be the right choice for everyone. If your business needs a loan greater than the $100,000 that StreetShares can lend, you may need to look at other financing options. Lending Club, the next provider on our list, can lend up to $300,000 to qualified borrowers.

What Users Think About StreetShares

StreetShares has glowing reviews from both borrowers and investors alike. Both sides of peer-to-peer lending tout that StreetShares is simple and easy to work with, and that the company has great customer support. Negative reviews, of which there were very few, were primarily from potential borrowers that did not qualify. To hear more about what users think, visit our StreetShares reviews page.

How to Apply for a Peer-to-Peer Business Loan From StreetShares

You can apply for a peer-to-peer business loan from StreetShares online in less than 10 minutes and receive pre-approval minutes later. You may be asked to provide additional documentation to finalize your application. Once approved, you can receive funding within two days.

Visit StreetShares

Lending Club: Best Peer-to-Peer Business Loans for Established Businesses

Lending Club’s business loans are a great choice for more established businesses that need to borrow more than $100,000. To qualify you will need to have one year of business operations and annual revenues exceeding $50,000. Lending Club requires borrowers to have “at least fair to better credit scores,” typically 650 or more is deemed fair (check your score for free).

Lending Club Small Business Loan Rates and Fees

Peer-to-peer business loans through Lending Club have an APR ranging from 9.77% to 35.71%. The origination fees for loans from Lending Club vary greatly and range from 0.99% to 6.99%. While strong borrowers may find significant savings with Lending Club, lesser qualified borrowers might find the rates and fees a deterrent.

The peer-to-peer small business loan rates and fees that you can expect from Lending Club are:

• Interest rate: 9.77% to 35.71% fixed APR
• Origination fee: 1.99% to 8.99%
• Prepayment penalty: None

The APR range for peer-to-peer business loans through Lending Club of 9.77% to 35.71% is slightly higher than those of StreetShares at 7.19% to 29.9%. However, when comparing Funding Circle vs Lending Club, Lending Club is in line with Funding Circle’s expected APR range of 10.97% to 34.78%.

Lending Club Business Loan Terms

Lending Club offers peer-to-peer small business loans in amounts ranging from $5,000 to $300,000. The repayment terms for these peer-to-peer small business loans will range from one year to five years.

The loan terms for peer-to-peer business loans from Lending Club are:

• Loan amount: $5,000 to $300,000
• Loan term: One to five years
• Repayment schedule: Monthly

While Lending Club’s maximum loan amount of $300,000 is significantly greater than both Prosper and Upstart, of $40,000 and $50,000, respectively, it falls in between StreetShares at $250,000 and Funding Circle at $500,000.

Lending Club Business Loan Qualifications

Lending Club has higher minimum requirements than StreetShares, which indicates that it is looking to cater to businesses that are a little more established. Lending Club requires that your business has been operational for at least one year, has annual revenues exceeding $50,000, and that your credit score is approximately 650 or higher.

The qualification requirements to receive a loan from Lending Club:

• Time in business: One year or more
• Credit score: Fair or better; approximately 650 or higher (check your score for free)
• Gross annual revenue: $50,000 or more

Additional Requirements for Lending Club

The additional documents that you will need to submit with your Lending Club application are:

• Business tax returns: Last two years
• Personal tax returns: Last one year for every individual with at least 20% ownership
• Interim financials: Year-to-date profit and loss and balance sheet
• Business bank statements: Last six months

What Lending Club Is Missing

It may be difficult for startups and emerging small businesses to meet the annual revenue parameters that Lending Club requires. However, for borrowers that can meet the revenue requirement, Lending Club can lend at higher loan amounts than some of the other providers. For borrowers that aren’t currently generating $75,000 or more in annual revenue, StreetShares, Prosper, or Upstart may be better options.

What Users Think About Lending Club

Like most businesses, Lending Club has customers that sing its praises in reviews and others that rate it poorly. Of the customers who were satisfied with Lending Club, they cite that the process was quick and easy for them and that customer service is friendly and helpful. Those who were unhappy with Lending Club seem to be borrowers that have defaulted on their loans or were declined credit.

How to Apply for a Peer-to-Peer Business Loan From Lending Club

Applying for a peer-to-peer small business loan with Lending Club is simple. You can prequalify online in a matter of minutes. Once you have prequalified, Lending Club will ask that you provide personal and business financial statements to support your application.

Visit Lending Club

Funding Circle: Best Peer-to-Peer Business Loans for Larger Businesses

Funding Circle is a good source of funding for larger business with annual revenues of $120,000 or more. A pioneer of peer-to-peer business loans, Funding Circle can accommodate loans of more than $300,000 at competitive interest rates. Qualified businesses will have two or more years of operations. Funding Circle’s application process can be completed online, and prequalification occurs in minutes.

Funding Circle Rates and Fees

Businesses seeking a peer-to-peer small business loan from Funding Circle can expect to see interest rates ranging from 4.99% to 27.79% depending on how well qualified they are. Additionally, Funding Circle charges a loan origination fee that ranges from 0.99% to 6.99% of the loan amount borrowed.

The peer-to-peer small business loan rates and fees that you can expect from Funding Circle are:

• Interest rates: 4.99% to 27.79%
• Expected APR: 10.97% to 34.78%
• Origination fee: 0.99% to 6.99%
• Prepayment penalty: None

Funding Circle’s starting expected APR is slightly higher than some of the lenders that we reviewed but, in general, its APR range falls in line with the other providers.

Funding Circle Loan Terms

Funding Circle offers peer-to-peer small business loans in amounts ranging from $25,000 to $500,000. The repayment terms for these peer-to-peer small business loans range from six months to five years.

The loan terms for peer-to-peer business loans from Funding Circle are:

• Loan amount: $25,000 to $500,000
• Loan term: Six months to five years
• Repayment schedule: Monthly

Aside from ApplePie Capital, which can fund up to $2 million to franchise borrowers, Funding Circle is the only peer-to-peer lender that we reviewed that can lend more than $300,000. Lending Club has the next highest maximum loan amount at $300,000, followed by StreetShares at $250,000.

Funding Circle Loan Qualifications

Funding Circle’s minimum requirements are the highest of the peer-to-peer business lenders we reviewed. To qualify for a loan through Funding Circle, you will need to have a credit score of at least 620, $120,000 or more in annual revenues, and at least two years of business operations. Newer businesses or businesses with lower annual revenues will likely have difficulty qualifying.

The qualification requirements for a peer-to-peer business loan through Funding Circle are:

• Time in business: Two years
• Credit score: 620 (check your score for free)
• Gross annual revenue: $120,000

Funding Circle requires two years of business operations, compared to the one year required by StreetShares and Lending Club. Additionally, its requirement of at least $120,000 in annual revenues exceeds the requirements of all of the other lenders on our list.

Additional Requirements for Funding Circle

The additional documents that you will need to submit with your Funding Circle application are:

• Business tax returns: Last two years
• Personal tax returns: Last one year for every individual with a minimum of 20% ownership
• Interim financials: Year-to-date profit and loss and balance sheet
• Business bank statements: Last six months

What Funding Circle Is Missing

With the restrictive qualifications that Funding Circle has, it is not a viable peer-to-peer business lending option for startup and emerging businesses. Even when comparing Funding Circle vs Lending Club, Lending Club’s qualifications are significantly less restrictive.

What Users Think About Funding Circle

Overall, customer reviews of Funding Circle are highly positive. They state that the process of obtaining financing from Funding Circle was very smooth and that its customer service is very helpful. The few negative reviews regarding the company are primarily from investors whose money was applied to loans that are now in default and affecting their return on investment (ROI). To read more reviews, visit our Funding Circle reviews page.

How to Apply for a Peer-to-Peer Business Loan From Funding Circle

Applying for a peer-to-peer business loan with Funding Circle can be done easily via its online application. In addition to completing the online application, you’ll be required to upload some of your business and personal financial records.

Visit Funding Circle

Prosper: Best Peer-to-Peer Business Loans for Startups

Many startup businesses are unable to meet the minimum time in business requirements of lenders. Borrowers with startup businesses may find it necessary to utilize a personal loan instead of a small business loan. Prosper offers personal peer-to-peer loans of up to $40,000 with three or five years terms and competitive interest rates.

Prosper Rates and Fees

Individuals seeking a peer-to-peer loan for a startup business from Prosper can expect interest rates ranging from 6.95% to 35.99%. Prosper charges a loan origination fee ranging from 2.4% to 5% of the loan amount. If you choose not to pay via automated clearing house (ACH), Prosper charges a check processing fee for each payment made by check.

The rates and fees that you can expect from a peer-to-peer loan from Prosper are:

• Interest rate: 6.95% to 35.99% fixed APR
• Origination fee: 2.41% to 5%
• Check processing charge: 5% of your payment or $5 ― whichever is greater
• Prepayment penalty: None

The APR for a loan from Prosper is in line with the other providers that we reviewed and caps out at $35.99%, which is equal to Upstart. Prosper does have the additional fee associated with check processing, which is not present with other lenders. However, this fee can be avoided if you pay via ACH.

Prosper Loan Terms

Prosper offers peer-to-peer personal loans in amounts ranging from $2,000 to $40,000. The repayment terms on these loans are either three years or five years depending on your needs.

The loan terms for peer-to-peer business loans from Prosper are:

• Loan amount: $2,000 to $40,000
• Loan term: Three or five years
• Repayment schedule: Monthly

Of the peer-to-peer lenders reviewed, Prosper has the lowest maximum loan amount. However, this is primarily due to the fact that Prosper offers personal loans, rather than small business loans.

Prosper Loan Qualifications

To qualify for a peer-to-peer loan from Prosper you will need to have a credit score of at least 640, your personal debt-to-income ratio will need to be less than 50%, and your credit history will need to show that you currently have at least three open credit accounts and that they are all in good standing.

The qualification requirements for a peer-to-peer loan from Prosper are:

• Credit score: 640 or higher (check your credit score for free)
• Debt to income ratio: Less than 50%
• Open accounts: At least three open credit accounts

Additional Requirements for Prosper

The additional documents that you may need to submit with your Prosper application are:

• Personal pay stubs
• Personal bank statements
• Personal income tax returns

What Prosper Is Missing

Peer-to-peer loans through Prosper are personal loans, so your personal financial situation is more heavily weighted. Prosper wants to ensure that you, as an individual, have the capacity to repay the loans. This also limits the amount that you can borrow. For qualified borrowers that require more than Prosper can provide, we suggest applying with StreetShares.

What Users Think About Prosper

Customer reviews are mixed for Prosper as consumers apparently either love it or hate it. Of the negative reviews, many are from people that were denied loans, and the remainder feels that their interest rates are too high. The customers that gave positive reviews enjoyed the ease of the process and have mentioned that they recommended Prosper to their friends.

How to Apply for a Peer-to-Peer Business Loan From Prosper

Applying for a peer-to-peer loan from Prosper is easy and can be completed on its website. Since this is a personal loan and not a small business loan, all of the required information will pertain to you as an individual. Be prepared to provide personal bank statements and proof of your income.

Visit Prosper

Upstart: Best Peer-to-Peer Business Loans for Recent Graduates Needing Startup Funding

For recent graduates looking to start their own business, Upstart offers peer-to-peer personal loans, ranging from $1,000 to $50,000, that can be used to fund a small business startup. Personal peer-to-peer loans from Upstart have APRs ranging from 7.98% to 35.99% with repayment terms of three or five years.

Upstart Rates and Fees

Individuals seeking a peer-to-peer loan for a startup business from Upstart can expect interest rates ranging from 7.98% to 35.99%. Additionally, Upstart charges a loan origination fee ranging from 0% to 8% of the loan amount.

The rates and fees that you can expect from a peer-to-peer loan from Upstart are:

• Interest rates: 7.98% to 35.99% Fixed APR
• Origination fee: 0% to 8%
• Prepayment penalty: None

The APR range for a peer-to-peer loan from Upstart fall in line with and are competitive to the APRs offered from the other lenders we reviewed. The one exception is ApplePie Capital, whose APR range tops out at just 12%

Upstart Loan Terms

Upstart offers peer-to-peer personal loans in amounts ranging from $1,000 to $50,000. The repayment terms on these loans are either three years or five years, depending on your needs. Additionally, there are no prepayment penalties should you decide to pay your loan off early.

The loan terms for peer-to-peer business loans from Upstart are:

• Loan amount: $1,000 to $50,000
• Loan term: Three or five years
• Repayment schedule: Monthly

While the maximum loan amount from Upstart is only $50,000, this is greater than Prosper’s maximum loan amount of $40,000. The smaller loan amount is due, in part, to the fact that both Prosper and Upstart offer personal peer-to-peer loans rather than small business loans.

Upstart Loan Qualifications

Because peer-to-peer loans offered by Upstart are personal loans, all of the qualification requirements need to be met by you as an individual. However, unlike many lenders, Upstart prides itself in looking at your potential rather than you focusing strictly on your present situation. Upstart does require that you have a credit score of 620 or higher.

The qualification requirements for a peer-to-peer loan from Upstart are:

• Credit score: 620 or higher (check your score for free)
• Job history: Must be employed or have another source of repayment income

Upstart’s minimum credit score requirement of 620, is lower than Prosper who requires a minimum credit score of 640 to qualify. Because this is a personal loan, you need to have repayment ability through employment or another means instead of annual business revenues as required by other lenders.

Additional Requirements for Upstart

The additional documents that you may need to submit with your Upstart application are:

• Personal pay stubs
• Personal bank statements
• Personal income tax returns

What Upstart Is Missing

Peer-to-peer loans through Upstart are personal loans, so your personal financial situation is weighted more heavily. Upstart wants to ensure that you, as an individual, have the capacity to repay the loans. This also limits the amount that you can borrow. For qualified borrowers who require more than Upstart can provide, we suggest applying with StreetShares.

What Users Think About Upstart

Negative reviews for Upstart are virtually nonexistent. More than 99% of their customer reviews have given the lender above average ratings. Customers are astonished by how fast and easy the loan application and approval process were, and how attentive the company’s customer service is.

How to Apply for a Peer-to-Peer Business Loan From Upstart

Applying for a peer-to-peer loan from Upstart is easy, can be completed online in minutes, and you can receive funding within one day of accepting the loan. In addition to your basic personal information, Upstart is going to request information regarding where you obtained your degree, and what your area of study was, this information aids them in determining your potential for success.

Visit Upstart

ApplePie Capital: Best Peer-to-Peer Business Loans for Franchises

If you run a franchise in its network, ApplePie Capital offers peer-to-peer business loans specifically to this niche small business market. ApplePie Core loans range in amount from $100,000 to $2 million with very competitive interest rates. For a broker’s fee, ApplePie Capital can also help you obtain Small Business Administration (SBA), conventional, and equipment loans. You can apply online easily, and its loans are typically funded within 30 days.

ApplePie Capital Rates and Fees

Franchise businesses seeking an ApplePie Core loan from ApplePie Capital can expect to see interest rates ranging from 7.75% to 12% depending on how well qualified they are. Additionally, ApplePie Capital charges a loan origination fee of 4.5% of the loan amount borrowed on all new loans.

The peer-to-peer small business loan rates and fees that you can expect from ApplePie Capital are:

• Interest rate: 7.75% to 12% fixed APR
• Origination fee: 4.5%
• Prepayment penalty: None

ApplePie Capital’s ApplePie Core loan offers the lowest overall APR range of 7.75% to 12%. All of the other lenders reviewed have APR ranges that reach 30% or more on the high end.

ApplePie Capital Loan Terms

ApplePie Core loans for franchises range in amounts from $100,000 to $2 million. The repayment terms on these loans can be anywhere from 5 years to 7 years, depending on your needs.

The loan terms for peer-to-peer business loans from ApplePie Capital are:

• Loan amount: $100,000 to $2 million
• Loan term: Five to seven years
• Repayment schedule: Monthly

The ApplePie Core loan from ApplePie Capital offers the highest maximum loan amount and longest repayment terms of any of the providers that we reviewed. Funding Circle’s maximum loan amount of $500,000 and five-year repayment term is the next highest on our list.

ApplePie Capital Loan Qualifications

To qualify for an ApplePie Core loan from ApplePie Capital, you must operate a franchise. ApplePie Capital requires that you have a credit score of 660 or higher, a down payment of at least 20% of the loan amount, a personal net worth greater than or equal to the amount you are borrowing, and that your franchise has been profitable for the past six months.

The qualification requirements for a peer-to-peer business loan for your franchise from ApplePie Capital are:

• Credit score: 660 or higher (check your score for free)
• Down payment: 20%
• Time in business: Six months (with profitability)
• Personal net worth: Greater than or equal to the loan amount

To qualify for an ApplePie Core loan, your business must be one of the franchises in ApplePie Capital’s network of franchises, and you must have a 20% down payment. If you are unable to meet these two qualification requirements, you’ll likely be better served by one of the other lenders on our list.

Additional Requirements for ApplePie Capital

The additional documents that you will need to submit with your ApplePie Capital application are:

• Business and personal tax returns
• Profit and loss statement and balance sheet
• Documentation of your personal assets and liabilities
• Franchise agreement
• Proof of down payment funds

What ApplePie Capital Is Missing

One of the biggest downfalls (or advantages, if you operate a franchise) is that ApplePie Capital is a niche lender that only provides loans to franchises. If your business is not a franchise, and you are seeking a loan of $100,000 or more, you may want to consider applying with Lending Club.

What Users Think About ApplePie Capital

Aside from the positive customer testimonials that appear on its website, there are very few reviews for ApplePie Capital available online. The company does have an A+ rating with the Better Business Bureau, and there are no negative complaints against them, and we were unable to find any negative reviews.

How to Apply for a Peer-to-Peer Business Loan From ApplePie Capital

You can apply online for a peer-to-peer business loan from ApplePie Capital. In addition to the basic information gathered through the online application, you will need to be prepared to provide the lender both your business and personal financial information, a copy of your franchise agreement, and proof that you have the required 20% down payment.

Visit ApplePie Capital

Alternatives to Peer-to-Peer Business Loans

Businesses that exceed the minimum requirements for peer-to-peer lending may also qualify for an SBA loan, which will likely have better rates and terms. Startup businesses that don’t meet the time in business or annual revenue requirements may be interested in exploring other startup funding options or unsecured business loans.

Some alternatives to a peer-to-peer business lending options are:

• SBA loans: An SBA 7(a) loan can be a great option for businesses that need longer-term working capital; while SBA loans are available up to $5 million, the average SBA loan is less than $350,000; repayment terms are available up to 10 years ― 25 years for real estate ― with rates ranging from 7.5% to 10%; navigating the application process can be intimidating; for more information, read our article on how to apply for an SBA loan.
• Startup loans: There are a variety of startup business loans available for businesses that may not meet the time in business or annual revenue requirements for peer-to-peer lending; startup funding can come from various sources like business credit cards, microloans, or home equity loans
• Unsecured business loans: You can get an unsecured business loan from online lenders like Kabbage and OnDeck; online lenders often have more lenient qualification requirements and fund more quickly than traditional lenders; unsecured business loans are among the most sought after working capital loans for small businesses

Peer-to-Peer Business Lending: Bottom Line

There’s no doubt that peer-to-peer business lending is a valuable financial tool for small business owners. They are especially beneficial for young businesses that are growing quickly and want a good rate on a medium-term loan. The best peer-to-peer business loans can also be just what well-established businesses need, especially if they are tired of dealing with laborious application processes at banks or other lenders.

If peer-to-peer lending seems like the right choice for your small business financing needs, StreetShares offers multiple lending options. It offers short term loans and lines of credit at rates ranging from 7.19% to 29.9% and contract financing with rates starting at 1%. You can apply online and receive funding in as quickly as two days.

Visit StreetShares