What is peer to peer investing?
Peer-to-peer investing (P2P), it sounds confusing doesn't it? But, fear not, despite the complex techy sounding name, it can actually be pretty straightforward.
Simply put, P2P works on the notion of 'one-to-many'. That is, your investment, along with the investments of others, will most likely be spread out across many different borrowers directly.
P2P is one of the many new forms of alternative finance, in the same boat as crowd-funding, that aims to circumnavigate traditional banking institutions in the hopes of greater returns on investments for lenders and more manageable borrowing rates for borrowers.
We believe one of the great things about P2P is the freedom of choice. Many different P2P platforms offer different sorts of investment opportunities, from property, to businesses, to people. This means that you may be able to choose where your money goes and what level of risk you assume, and as a result, what potential return you could receive.
At Fundshare, our aim is to help you choose an investment that could work for you. Using our handy search tool, you can determine your investment specifics based on the type of loan you wish to invest in, the level of involvement you'd like in your investment and any other additional securities that you'd like, such as provision funds or insurance.
We'll then give you a list of potential platforms for you to compare and contrast. Then, if and when you're ready, you can go directly to your chosen P2P platform to learn more.
Do remember that as P2P is an investment and not a savings account, your capital is at risk.
Some quick facts about P2P lending:
- By November 2016 £8.6 billion was lent through P2P in the UK alone (1)
- The UK is responsible for nearly 85% of the European lending market. The largest other European countries are France at 4.32%, Germany at 3.25% and Sweden at 2.17%. (2)
- Between Q3 2014 and Q3 2016 59% of P2P loans were lent to businesses (3)
Our straightforward guide to peer to peer investing
Download the guide and take it with you wherever you go.