User:EricsWikis/Business Social Lending
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Peer-to-Business Social Lending (also known as P2B, Everyone to Business Social Lending (E2B), Business CrowdLending and Business CrowdFunding) is an alternative to financial transaction (primarily lending and borrowing, though other more complicated transactions could be facilitated) which occurs directly between one or more individuals and a business without the intermediation of a financial institution.
Overview
[edit]Businesses, in particular small businesses, commonly struggle to secure the capital they need to start or grow their businesses. There for creative alternThe basic methods are broadly grouped into two categories, loan and investment.
Peer-to-Business Social Lending is a unsecured loan where the funds are provided one or more individuals who negotiate and execute a loan note and all terms directly with a business.
Business Social Lending can be known by several different names and acronyms.
- Peer to Business (P2B) Social Lending
- Everyone to Business (E2B) Social Lending
- Business CrowdLending
Characteristics
[edit]Lending vs Investing
[edit]There are two structures that can be used facilitate a P2B loan. The must common model is patterned after the many Peer-to-Peer sites where there is an indirect relationship between the parties. Individuals invest in loan notes which back the sites' loans which they rate and approval. These sites share many similarities to independent investor sites like Schwab, eTrade, etc. The actual lending is between the site and the individual borrower.
In a direct lending site, there is no requirement for the lender to be a high net worth individual because they are not investing, but actually lending to the borrower. While the identity between the lender and borrower is anonymous (to ensure privacy of the parties financial information, etc.) until they engage in an actual transaction, there is a direct relationship where the parties can communicate direct. Because of this direct relationship, both the site and the parities can be promoted on social networks.
Less common is a module which
Secured vs Unsecured Loans
[edit]Loans also fall into two broad categories, secured and unsecured. Secured loans are either asset or debt based. Unsecured, sometimes referred to as Signature Loans, are based on the lenders belief that the borrower and and will repay the loan. Investments can come in a number of forms including, Angel, Venture Capital and Friends and Family.
Friends and Family Lending
[edit]The Social Network
[edit]Investment based sites are regulated and therefore a direct relationship between the Lender(Investor) and the Borrower is prohibitated by law. This makes the formation of a social network virtually impossible. Because of this only the site can be promoted by a social network model.
With the
References
[edit]External links
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