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Where can i lend my money?

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Answer # 1 #

In a World increasingly defined by economic uncertainty, private lending is growing in popularity as a way for individual investors to diversify their portfolios outside of the stock market, and find a safe, productive home for their capital.

At face value, the appeal of private money lending seems obvious…

… providing short-term, asset-backed loans to real estate investors allows private individuals to ‘become the bank‘, earning a great rate of interest while physical and insured real estate is held as security.

Simple, right? Well, yes. But of course, there’s more to it than that!

As with anything nowadays, there are an increasing number of legalities and regulations you should be aware of when lending private money. And, if you want to lend your money as safely as possible, there are definitely a few more things you should know before you get started.

In this article, I’m going to walk you through some of the most important lessons I’ve learned taking part in over 100 private lending transactions as both lender and borrower in the past 10 years, and give you my top tips for lending money legally and safely in 2022.

Pro Tip: Join 5,000+ investors and get fully-vetted private lending opportunities in your inbox every Thursday

Broadly speaking, there are no restrictions on who can become a lender. But there are definitely some restrictions on the type of loans you can originate, to whom you can lend, and on what terms.

One of the key things to be aware of as a private lender is the difference between consumer lending and commercial lending. You definitely don’t want to stray into the heavily-regulated world of consumer finance, trust me!

Here’s the difference between the two, and why it’s important to know…

For the most part, a consumer loan is a loan that’s issued to a consumer; or, in laymans terms, an individual person. This includes mortgage loans for the purposes of purchasing a primary residence.

When talking specifically about mortgages (which we are) a commercial loan is usually used for the purposes of purchasing (or refinancing) real estate that is NOT the borrower’s primary residence.

More often than not, the borrower on a commercial loan will be a corporate entity such as an LLC.

This distinction is important because…

After the 2008 recession, the US Government signed the Dodd-Frank Wall Street Reform Act. The idea behind this legislation was to safeguard consumers and taxpayers from the big risks taken by investment banks.

As a result, lenders now have to do a lot more work to prove that borrowers understand the risks involved when taking out a loan, and that the loan terms are appropriate and affordable.

This includes much higher standards when when it comes to things like verifying credit history, income and employment status. And… there are also nationwide licencing requirements for originating residential mortgage loans.

So, if you are going to be doing any private lending, you need to be sure that you are not originating a consumer mortgage loan.

Instead, simply stick to lending your money to real estate investors for the purposes of purchasing, renovating or refinancing an investment property.

Sticking to this simple rule will ensure you won’t trip up and inadvertently break the law!

Usury laws are designed to protect borrowers from predatory lenders. These regulations cap the amount of interest a lender can charge a borrower.

This is especially important in the world of private lending where interest rates are usually much higher than consumer loans.

If you set your interest rate or total amount of interest too high, you might end up on the wrong end of a lawsuit, or worse, find yourself with an unenforceable loan.

Each state has it’s own state-specific usury laws, and the laws that apply to any mortgage loan you originate will depend on the state the real estate is located in, note where the loan originator or lender is based as well.

Pro Tip: Make sure you’re aware of the Usury laws in the State you’re lending in.

Alongside usury laws, each state has it’s own regulations on lending in general.

In some states, such as California and Oregon for example, it is illegal to originate a mortgage loan without the proper state-issued licence.

There are also licensing requirements for different parts of the lending process, from originating loans through collecting payments (servicing), these vary from State to State.

It’s a good idea to check with an attorney in the state you want to lend in about any restrictions or licensing requirements that you need to be aware of.

When it comes to licencing requirements for originating loans, it can be relevant where the loan originator or lender is based as well as where the property is located, so make sure to check out any State licencing requirement in your own area.

Related: Performing Notes vs Non Performing Notes | Which is the Best Investment?

One of the very best things about private lending is that you get to select exactly who you work with, and what lending terms you’ll agree to. So, you can pick and choose the investment that meet your needs, in theory at least.

Of course, nothing is ever that easy.

Here are some hints and tips I’ve picked up through the course of over 100 private lending deals to help guide you on your way to making lending investments that meet your risk/return criteria.

First things first, you need to set your own investing criteria. That will help you create a vetting process that weeds out the deals and borrowers you do not want to work with, and shortlists the ones you do.

Here are some useful questions to ask yourself:

What are your investing priorities? Monthly income? the best ROI? the safest possible deals? Answering these questions will help you shortlist appropriate deals, and set lending terms that meet your tolerance for risk.

For example, if you are closer the the start line than the finish line when it comes to your investing career, you might be prepared to take bigger risks. In that case, lending on pre-rehab renovation projects with a higher loan-to-value (and interest rate) might be more up your street.

If instead you are focussed on preserving capital and generating reliable, consistent monthly income, you might be better lending only against fully renovated properties at a lower loan-to-value, in exchange for a lower rate of interest on your money.

Here are a couple of different types of private money lending deals you should consider…

This is the bread and butter of the private lending world.

Real estate investors often turn to private lenders for funding when a deal needs closing fast with cash.

This type of short term funding is expensive compared to bank loans, but private lenders are way more flexible on terms, and can fund deals much faster and on short notice.

Most of the time it’s a pretty happy marriage between operational capacity and passive capital. Here’s how it works…

The RE investor will find a house they want to purchase, do their due diligence, and put together a plan to renovate the property to add value and then either sell (flip) or refinance (hold as a rental).

The private lender will loan the RE investor a portion of the funds required for the acquisition, and sometimes also some or all of the funds required for the renovation.

For example, a lender might offer 80% of the purchase price, and 100% of the rehab budget. The RE investor will have to come up with the extra 20% for the purchase, and also carry any overages on the rehab budget.

Once the property is renovated, the RE investor will either sell or refinance with a traditional lender in order to pay back the private lender.

In exchange for the use of funds, the private lender will charge an interest rate and sometimes points, which is effectively upfront interest paid to the private lender out of closing.

At current market rates, private lender charge interest rates ranging from 8% to 15%, and 1, 2 or 3 points, depending on the risk attached to the borrower, property plan and property.

These are the riskiest types of private money loans because there is always something that could go wrong with the project, such as large unexpected repairs, or failing to sell/refinance in time or for the expected value.

That’s why the interest rate charged by private lenders for this type of deal is so high.

For the investor with less appetite for risk but still desiring a great returns on investment, there are opportunities to lend money secured against fully-renovated real estate in the form of long term rental loans, or short term bridge loans.

This type of loan eliminates or mitigates much of the risk associated with private lending because there is no construction required.

The collateral property is valued in as-is condition – often having been recently renovated, tenant-occupied and producing cashflow.

So, in these cases, the lender has a lot more certainty about what the property is worth, and what level of risk they are taking.

If the borrower defaults, they are getting a house in great conditions that is producing rental income to replace lost interest income, and it is likely to be much easier to sell to recoup the lenders investment.

Of course, this type of lending attracts a lower premium in terms of interest rate due to the significantly lower risk, but still lenders earn between 7% and 9% p.a. – still far better than 1% or 2% in a deposit account.

Related: See fully-vetted lending investment opportunities in the Private Lender Portal

Once you’ve decided on the level of risk you’re prepared to take, and the type of lending you’re comfortable with, you really need to be comfortable with the borrower before anything else.

A goof operator with lots of relevant experience can save a bad project. Likewise, a bad operator can just as easily ruin a perfectly good project.

In private lending, you should should focus on the 4 P’s… People, Property, Paperwork and Plan.

The people are responsible for taking the cations that will lead to the success or failure of a project.

The property acts as security for your investment, and the paperwork is there to allow you to take control and have recourse if something goes wrong.

These elements of a private lending deal are all just as important as each other, but it’s the people that most most lenders put first in when making their lending decisions.

Remember, you’re entering into a business relationship with your borrower. You need to be comfortable with them, how they conduct themselves personally, their level of experience successfully completing similar projects, and how they do business.

Put the people first, and don’t be tempted by a great looking deal with stellar returns if your gut tells you it’s too good to be true. I guarantee you it probably is!

Related: Understanding Credit Risk for Note Investors and Private Lenders

Recently, I  had a great guest on my Investor Conversations podcast as part of our Note Investing Mastery mini series.

Tracy Z is a 30-year note investing veteran, and Co-Founder of noteinvestor.com, a leading note investing education platform.

During this episode, we talked about some of the most common mistakes made by investors that are new to mortgage note investing, and one of the biggest takeaways for me was that Tracy always takes extra care to check out taxes title and liens.

Now, while this podcast episode was about note investing, Tracy focuses her own investment efforts specifically on performing notes such as seller finance notes, there is a huge amount of crossover with private lending, and her advice holds true for both modes of investing.

As a lender, you are relying on the property as the ultimate fallback if something goes wrong with your investment. But if there are issue with title, or liens, or unpaid property taxes, that could get in the way if the property must be sold. In some cases you might even be facing a total loss.

That’s why it’s super-important to close your loan properly through a title company or attorney, make sure they do full title work and resolve any issue before you fund the loan, and make sure you get both lenders title insurance AND that the property is insured.

As a warning, Tracy tells the story of how she closed on the purchase of a note secured against an uninsured property, only to see the property burn down the very next day!

So yes… taxes, title and liens are very, very important, but easily mitigated with proper title work, proper closing, and proper insurance.

Pro Tip: Join 5,000+ investors on my Priority Investor email list and get a ton of FREE private lending tools and resources

This was another thing we talked about in my podcast episode with Tracy Z.

In fact, this is a topic of conversation that has come up time and again on my podcast.

Private lending is no different to any any investment… you need to know your worst case scenario.

In my experience, your worst case is usually a borrower defaulting i.e. they stop making payments, or fail to pay back the loan at maturity.

Unfortunately, unless you have a great, communicative borrower (which you really do want), you won’t know there’s even a problem until this happens.

There could be a number of reasons for a default, including problems with cost or timeline of the renovation, a change in market conditions slowing or stopping a the planned sale of the property, or a failure by the borrower to secure refinancing.

Whatever the reason, you must be prepared to pivot when the plan isn’t the plan anymore.

Will you step in and finish a rehab if it doesn’t go to plan? Will you simply foreclose and force a sale? or will you aim to negotiate taking ownership yourself?

These are all viable options in a default scenario, but not all of them will be suitable or desirable for every lender or every project.

If you are lending against a house located way across the country, it’s unlikely that you’ll want to try and finish the rehab project yourself. In that case, your worst case might be a sale in as-is condition.

That’s why knowing your worst case (and having a viable contingency) is important.

It will help you to formulate your lending terms, including how much you’ll lend, what kind of projects you’ll fund, and the type of borrower you’ll work with.

Related: Understanding and Assessing Credit Risk for Private lenders and Note Investors

Your paperwork is one of the the P’s (Payor, Property and Paperwork).

Regardless of the quality of the real estate, or the capability of the borrower, you will ultimately be relying on our paperwork to recoup your investment if things go badly wrong.

So, you absolutely need to make sure your documentation is in order to protect your investment.

You also need to make sure your paperwork is recorded properly, that you are investing against a property with clear title, and that you have all the relevant insurance in place.

That’s why is absolutely essential to close your loan through a proper title company or attorney.

Your primary paperwork for any lending transaction comprises three main elements; a loan agreement, a promissory note, and a lien (deed).

Each item serves a different purpose, and they work together to define the terms of the investment and provide you with security in the form a legal charge over the real estate.

Aside from perhaps a loan application, the loan agreement (I call mine a Funding Agreement) is a an agreement between the borrower and the lender that defines the commitments, roles and responsibilities of each party.

This will contain things like the legal names and addresses of both parties, the property details, loan amount and terms, and details about what happens at closing.

In the case of renovation loans, the loan agreement might also include details of how funds are drawn down by the borrower for each phase of construction.

Once this agreement is ion place, everyone know hat they are committed to do, and to a timeline.

Pro Tip: Have an attorney draw up your loan agreement template which you can then edit with details specific to each transaction

Your promissory note is the contract between you and your borrower.

This document contains the terms of the loan, including the amount, interest rate, payment schedule, and a long list of legal jargon and clauses that define your recourse if the borrower defaults.

Notes are entirely subjective, and the terms are specific to the deal between the borrower and the lender at the time of the loan.

It is also worth noting that the language in a promissory note varies from state to state, so it is absolutely worth paying an attorney to draft or review your note before funding a loan.

Related: Real Estate Notes | Everything you Need to Know

Your deed will be either a Mortgage Deed or Deed of Trust depending on where the real estate is located.

This is the document that is recorded in the County records on the title to the the real estate, and gives you a legal charge for the amount of your loan.

Your deed ensures you are paid out of the proceeds of a sale of the real estate, such as in the case of a foreclosure sale, or even just the borrower selling the property as planned.

Your lien can be in either 1st position or 2nd position, and you always want to be in first position.

1st position liens are paid back first when the property is sold, whereas 2nd position liens are paid back from any remaining funds. So, if the proceeds of the property sale are insufficient, a 2nd position lender could lose everything.

Whether it’s your loan agreement, promissory note or mortgage deed/deed of trust, make sure to have your paperwork drafted or reviewed by a qualified attorney to avoid any upsets if you end up foreclosing the loan.

Related: Understanding Lien Position and Priority for Private Lenders

The final piece of advice I have for you is to use a proper closing company or attorney to close your loan, record your deed, and provide you with title insurance.

I’ve had to relay on title insurance in the past when selling houses that had title issues that were missed when I bought the house. If we didn’t have this insurance in place, both my private lender and I would have lost out.

Your closing co. will also distribute funds according to the settlement statement, and you can further add conditions such as checking the property insurance is in place.

Remember the story Tracy Z told about an uninsured house burning down the day after she bought the mortgage? These thing happen, so making sure everything is in order at closing is your backstop for tragedy.

So, that conclude my top five tips for anyone considering doing any private lending in 2022.

Remember, whilst loaning your money can be very profitable, you need to educate yourself and take professional advice if you are going to lend money legally and safely.

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Answer # 2 #

As interest rates remain stuck at 0.01%, it’s likely you’re looking at places to put your money that actually beat inflation and grow your hard-earned savings.

Lending money online for profit is an investment strategy that’s been around for a while (it’s pretty much what banks do) but didn’t really take off until the financial crisis in 2008 when banks shut the door on businesses and individuals who needed loans.

The internet came along and produced a marketplace so people could loan money to each other, and skip the banks – hence, peer to peer lending. Thanks to the internet, you can now act as a bank, loan your money to strangers, and make a decent profit on it.

Over 10 years later, lending money online to others is a strategy that is still going strong.

At Swaper, we offer a platform that allows you to invest by lending money online to other individuals securely and make a profit.

When you’re lending money online, you are essentially taking up the role of a bank or lender. These days, many businesses and individuals don’t want to go to banks to take out a loan because the requirements are too stringent or the fees are not worth it.

(Especially during periods of recessions, banks don’t like taking on too much risk, forcing people to go elsewhere).

Let us present you, an investor.

You are happy to lend your money to those people and businesses as long as they meet certain requirements and can pay an interest rate. The borrower is happy because they are charged fewer fees and are much more likely to be approved; you’re happy because that interest rate is your profit.

However, if you wanted to lend money to thousands of strangers, you would need to meet stringent financial requirements, follow specific country rules and might even be licensed. It’s a process that is a big hassle and requires a lot of upfront capital – you essentially need to set up a company in the financial sector.

And that’s where we come in: at Swaper, we went through all the hassle and set up a compliant and secure lending company. We’ve created the platform, secured the loans and collect the interest earned. As an investor, you just need to open an account and you can start investing immediately.

When you invest with Swaper, you’ll be lending your money to hundreds of people and we’ll act as the middle-man to make sure you get your money back along with profit.

By lending money online with us, you’ll get an expected annual return of 14% on your investment (although legally we cannot guarantee this). That’s not a bad deal when compared to the 0.01% you’re currently getting on your savings account…

Still interested? Here’s how you can get started.

At Swaper, we’ve made it incredibly easy to start lending money online.

Here’s a recommended step by step path to follow:

If you are new to the P2P investing world, it’s worth reading up on how the industry works, what the risks are and the essentials to getting started. As is the case with all types of investing, lending money online doesn’t come risk-free. We’ve put together a few resources to help you understand what p2p investing is all about. To quickly summarise, here are the main types of risk you must be aware of when you start lending money online:

We offer loans through a “loan originator” called Wandoo Finance Group. A loan originator is a company that acquires borrowers looking for a loan. Wandoo manages the loans with the borrowers from Poland, Denmark and Spain, and then “sells” those loans to us, Swaper.

There is always a risk that a borrower defaults on their loan – meaning they don’t repay on time. If the borrower does not repay on time, our buyback loan scheme kicks in and we refund the missing payments ourselves. You won’t lose your money, but there is a risk that it will take longer to reach your account.

At Swaper, we offer investors the opportunity to invest with both GBP and EUR accounts. There is less risk and fewer fluctuations if you stick to one currency as you’ll keep costs low. If you’re investing in a different currency, we offer the cheapest currency conversion rates with TransferWise.

What happens if Swaper goes bankrupt? The good news is that when you lend your money online with us, you are buying claim rights against the borrower based on an agreement. These agreements are not affected by Swaper, which means that they will still remain in place even if we go bankrupt – which is highly unlikely (but we understand your concerns).

These are three main types of risk you need to be aware of when you lend money to people online. With Swaper, we are one of the few P2P investing platforms that offer buyback on both the invested principal and interest accrued. You can learn more about P2P investing on our Swaper blog.

Once you understand the risks of lending money online and how P2P investing works, you’ll be ready to set up an account!

At Swaper, we’ve made it as simple as possible to get started. You’ll just need to click on “Open Investor Account” or “Sign Up” and then follow the steps. We’ll ask you for personal details and need to verify your identity with a passport and utility bill. We accept investors from all European countries, and you’ll be able to start investing with just 10€!

There are two main ways to invest in loans and lend money online: using the Auto-Invest function and manually picking the loans to invest in.

At Swaper, the auto-invest function makes it very easy to start lending and is our most popular feature. You just need to create an “auto-invest” portfolio and we will automatically invest in loans based on specific criteria. What do we mean by criteria? There are a few aspects of the loans you invest in which you can tweak and adjust:

If you don’t select any of the criteria, it will simply use the default criteria which are automatically set to maximise your return on your investments. You can also choose to invest in loans manually, which means picking the loans that you specifically want to invest in. This will require some research and more work on your part.

Once you start investing, you’re good to go! You can keep adding money to your Swaper account every month or add it as a lump sum whenever you want.

Want to sell and withdraw? You’ll get all your money back within 30 days, and an additional 30 days if there are any loans under the buyback.

Once everything has been sold, you can withdraw your money from Swaper and receive it all in your bank account within 2 business days.

It’s good practice to check your account and track your performance over time to see how your earnings accumulate.

We also recommend checking the Swaper blog every now and then so you know if we’re releasing any new features or loyalty bonuses. You can also download the Swaper P2P loan app so the loans you’re investing in are literally at your fingertips.

Thanks to Swaper, it’s now incredibly easy to lend money online for profit.

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But now peer-to-peer (P2P) lending has come onto the market, offering loans to borrowers directly from individuals — and usually carrying more favorable terms for those without a great credit profile. Borrowers can access up to $50,000 (or more) from lenders, with fixed term repayment scheduled and reasonable interest rates. Investors can also become lenders on P2P platforms, earning interest collected on loans as a passive form of investment income.

Let’s break down some of the best peer-to-peer lending sites for both borrowers and investors, so you can determine which option is best for you.

Prosper is the OG peer-to-peer lender in the market. It was founded in 2005 as the very first peer-to-peer lending marketplace in the U.S. According to their website, they’ve coordinated over $22 billion in loans.

If you’re a borrower, you can get personal loans up to $50,000 with a fixed rate and a fixed term from two to five years in length. Your monthly payment is fixed for the duration of the loan. There are no prepayment penalties, either, so if you can pay it off early, you won’t be penalized.

You can get an instant look at what your rate would be and, once approved, the money gets deposited directly into your bank account.

As an investor, you have many options on loans to choose from. There are seven different “risk” categories that you can select from, each with their own estimated return and level of risk. Here’s a look at the risk levels and the estimated potential loss, according to Prosper:

As you can see, the lower the letter, the greater the risk of default, hence a higher estimated potential loss. With just a $25 minimum investment, you can spread your risk out across all seven categories to provide your portfolio some balance.

The borrowers that you’re lending to are also above U.S. averages regarding their FICO score and average annual income.

Learn more about Prosper or read our full review.

BlockFi is a popular crypto lending platform that offers crypto-backed loans to borrowers and pays out interest to lenders. BlockFi offers instant loans and requires no credit checks for borrowers. All loans are collateralized, meaning borrowers will need to lock in their crypto to borrow against it.

If you’re a borrower, you can get a crypto loan for up to 50% of the value of your crypto, with rates ranging from 4.5% to 9.75% APR, depending on the amount of collateral. Payments are made monthly and are fixed for the duration of the loan.

Interest rates are determined by the amount of collateral deposited and the loan-to-value (LTV) of the overall loan. There is a 2% origination fee on all loans.

Bitcoin (BTC), Ether (ETH), Paxos Gold (PAXG), or Litecoin (LTC) can be used as collateral for the loan, and can be liquidated if the LTV goes above the original LTV of the loan.

BlockFi offers interest accounts for users who deposit crypto. The funds are used for crypto lending, and interest is paid out in the native crypto deposited. Interest rates vary by cryptocurrency, and range from 0.10% APY up to 7.50% APY. Stablecoins (such as USDC) pay out the highest rates.

Crypto interest accounts are not available to U.S. investors, as BlockFi was sued by the SEC for violating securities laws.

Learn more about BlockFi or read our full review.

Upstart is an innovative peer-to-peer lending company that was founded by three ex-Google employees. In addition to being a P2P lending platform, they’ve also created intuitive software for banks and financial institutions.

What’s unique about Upstart is the way they determine risk. Where most creditors will look at a lender’s FICO score, Upstart has created a system that uses AI/ML (artificial intelligence/machine learning) to assess the risk of a borrower. This has led to significantly lower loss rates than some of its peer companies. Combine that with an excellent TrustPilot rating, and this company is certainly making waves in the P2P marketplace.

Borrowers can get loans from $1,000 up to $50,000 with rates as low as 5.6%. Terms are either three or five years, but there’s no prepayment penalty.

Using their AI/ML technology, Upstart looks at not only your FICO score and years of credit history, but also factors in your education, area of study, and job history before determining your creditworthiness. Their site claims that their borrowers save an estimated 43% compared to other credit card rates.

Investing with Upstart is also pretty intuitive. Unlike other P2P platforms, you can set up a self-directed IRA using the investments from peer-to-peer lending. This is a unique feature that many investors should be attracted to.

Like other platforms, you can set up automated investing by choosing a specific strategy and automatically depositing funds.

Upstart claims to have tripled their growth in the last three years due heavily to their proprietary underwriting model, so it might be worth a shot to consider this option.

Learn more about Upstart or read our Upstart review.

SoLo Funds is a peer-to-peer platform that functions as a short-term lender, similar to payday loans. With term lengths only lasting for up to 35 days, loans must be paid back in a narrow timeframe. But instead of charging fees, borrowers can leave an optional tip instead.

SoLo Funds is an affordable option for clients who are in a pinch and need an advance on payday, but there are hefty fees if loans are not paid back within 35 days. Users will need to pay a 10% penalty plus a third-party transaction fee if late.

Borrowers can take out loans up to $575 for a maximum of 35 days. Loans do not charge fees, but allow borrowers to select an optional tip amount to lenders.

Loan applications only take a few minutes, and while most loans post within a few days, some may be instantly approved, offering same-day funding with money transferred to borrowers within a few hours.

Loans must be paid back in full within 35 days, or there is a 10% penalty plus other transaction fees. There is no option to roll the loan over.

Lending is fairly straightforward, with a simple sign-up process and no pre-qualifications needed. Since the loans are smaller amounts (up to $575), there are no minimums required for lending.

SoLo Funds has a marketplace of loan requests from borrowers, with details specified on each. Each loan request shows the amount needed plus the tip given by the borrower for the loan. Each borrower also has a SoLo Score, on a scale from 40 to 99, with higher scores showing more “worthiness” for paying back a loan. Loans can go into default, and if needed, to collections through a third party. There is a risk of total loss with SoLo Funds investing, though the platform does offer insurance against loss for a fee.

Learn more about SoLo Funds.

FundingCircle is a small business peer-to-peer platform. The company was founded with the goal of helping small business owners reach their dreams by providing them the funds necessary to grow.

So far, they’ve helped 130,000 small businesses across the world through investment funds by 71,000 investors across the globe. FundingCircle is different in that it focuses on more substantial dollar amounts for companies that are ready for massive growth. They also have an excellent TrustPilot rating.

As a borrower, the minimum loan is $25,000 and can go all the way up to $500,000. Rates come as low as 5.99%, and terms can be anywhere from six months to seven years. There are no prepayment penalties, and you can use the funds however you deem necessary — as long as they are for your business.

You will pay an origination fee, but unlike other small business loans, funding is much quicker (you can be fully funded as quickly as 1 business day).

As an investor, you’ll need to shell out a minimum of $25,000. If that didn’t knock you out of the race, then read on.

According to FundingCircle, you’ll “Invest in American small businesses (not start-ups) that have established operating history, cash flow, and a strategic plan for growth.” While the risk is still there, you’re funding established businesses looking for extra growth.

You can manage your investments and pick individual loans or set up an automated strategy, similar to Betterment, where you’ll set your investment criteria and get a portfolio designed for you.

Learn more about FundingCircle.

If you want to do some good in the world, you’ll find an entirely different experience in P2P with Kiva. Kiva is a San Francisco-based non-profit that helps people across the world fund their businesses at no interest. They were founded in 2005 with a “mission to connect people through lending to alleviate poverty.”

If you’d like to borrow money to grow your business, you can get up to $15,000 with no interest. That’s right, no interest. After making an application and getting pre-qualified, you’ll have the option to invite friends and family to lend to you.

During that same time, you can take your loan public by making your loan visible to over 1.6 million people across the world. Like Kickstarter, you’ll tell a story about yourself and your business, and why you need the money. People can then contribute to your cause until your loan is 100% funded. After that, you can use the funds for business purposes and work on repaying your loan with terms up to three years.

As a lender, you can choose to lend money to people in a variety of categories, including loans for single parents, people in conflict zones, or businesses that focus on food or health. Kiva has various filters set up so you can narrow down exactly the type of person and business you want to lend your money to. You can lend as little as $25, and remember, you won’t get anything but satisfaction in return — there’s no interest.

You can pick from a variety of loans and add them to your “basket,” then check out with one simple process. You’ll then receive payments over time, based on the repayment schedule chosen by the borrower and their ability to repay. The money will go right back into your Kiva account so you can use it again or withdraw it. There are risks to lending, of course, but Kiva claims to have a 96% repayment rate for their loans. Just remember, you’re not doing this as an investment, you’re doing it to help out another person.

Learn more about Kiva.

As the name suggests, peer-to-peer lending involves private individuals making loans to other individuals. The system runs contrary to the traditional model of banks and credit unions providing financial services because it cuts out the middleman.

While peer-to-peer lending had a surge in users over the past decade, in the past few years, some P2P lending companies have shuttered their services, including StreetShares, Peerform, and LendingClub.

Peer-to-peer lending shares many similarities with traditional lending:

No one would say that peer-to-peer lending is 100% safe. No form of investing is. Many of the best peer-to-peer lending sites vet borrowers and investors to mitigate risk. The review process helps eliminate untrustworthy candidates, so borrowers can receive their loan and investors can earn interest.

Read more: Should you invest in peer-to-peer loans?

Peer-to-peer lending is a great option for borrowers with less-than-stellar credit who want access to capital with reasonable terms and rates. P2P lending is ideal for small businesses and individuals who are looking for a personal loan that does not require mountains of paperwork, and that is funded quickly (usually within a few days).

But not all P2P lending platforms operate the same, and some can charge high origination fees and interest rates. Others require high minimum loan amounts to borrow as well, making them less accessible to some borrowers.

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