Five Peer-to-Peer (P2P) Lenders in Australia

P2P lending is a business of lending funds to individuals in need through an online platform or marketplace. In this type of lending, the investor sources capital to the platform operator, who thenlends the funds to the individuals and charges interest.

Investors in the P2P lending platform earn a rate of interest through the investments, and borrowers pay the interest on loans along with the principal at the end of the tenure. Generally, the interest rates charged by the platforms are lower than the traditional lenders, and the investor earns a rate of interest that is higher than the prevailing deposit rates.

The lending process is primarily online, depending upon the platform operator/marketplace. It comprises a range of criteria, including credit scores, income, and age, among others. Borrowing via P2P is considered to be better than utilising a credit card given the relatively low hassles in accessing the funds.

P2P lending is alternatively known as social lending, crowdfunding or crowd lending. For fixed income investors, the P2P lending businesses have provided an additional asset class to earn a regular income. P2P businesses act as a bridge between the persons willing to lend and the persons willing to borrow.

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Let’s discuss five P2P lenders in Australia:

CoAssets Limited (ASX:CA8)

Founded in 2013, CoAssets Limited is a digitally powered investor platform, which includes retail investors as well as institutions. The business has a regional presence in Australia, Hong Kong and China.

Recently, the Company completed the acquisition of Brighten Finance Limited, following the purchase of the remaining 75% from Ever-Pioneer Brighten Technology Fund. The Company also disposed of its 49% interest in Fintech Pte Ltd.

It is paying S$9.5 million for the remaining interest in Brighten Finance, which would be paid in lieu Fintech Pte shares worth S$8.5 million, and transfer of around S$1 million of other financial assets.

Brighten Finance is a Hong Kong-based money lender, having a license since March 2017. The lender funds operations through the issuance of promissory notes.

Last month, the Company also provided an update on COVID-19. It was highlighted that the business had adopted remote working, and it remains business as usual for the Company.

MoneyPlace

MoneyPlace is digital age lender, founded in Australia by Stuart Stoyan. The Company offers debt consolidation, car loans, travel loans, home improvement, weddings loans and medical loans.

The eligibility criteria for an applicant include a minimum age of 18 years and working and earning over $20k per annum. Applicant should be an Australian citizen or a permanent resident. Applicants that are not eligible include collections employees, persons with unpaid defaults, bankrupt persons, and any person who earns maximum income from the Government benefits.

The lender offers personalised rates to the customers starting from 7.65%. It notes that an average customer saves around $5k during the term of the loan when they consolidate credit cards and personal loans with a lender.

Marketlend

Mr Leo Tyndall founded Marketlend. Prior to incorporating the business, Mr Tyndall was associated with UniCredit, National Australia Bank, RAMS Home Loans. He is a nationally accredited mediator and qualified barrister.

The Company offers supply chain finance, debtor finance, line of credit, and UnLock. For an investor, some of the eligibility criteria include a minimum investment of $500k, minimum net assets of $2.5 million, agross income of over $250k in the last two years.

Marketlend’ supply chain finance alleviates cash flow challenges through extending the trading terms by up to 90 days, and it does not constitute a loan but an extension of the accounts payable terms.

RateSetter

Founded in 2010, RateSetter was born in the UK. It is one of the leading peer-to-peer lending platforms in the region. The business is regulated by the Financial Conduct Authority, having invested around £3.6 billion, as per its website.

In Australia, the business has loaned to around 42.7k Australians, according to the website. It notes that the products are fast, flexible, secured and unsecured having tenure of six months to five years.

The lender lends to customers with secure credit history, asking for loans in the range of $2k to $45k. RateSetter notes that over 20k investors have joined the platform, and it has a Provision Fund that seeks to protect investors from the loan defaults.

In Australia, RateSetter offers debt consolidation loans, home renovation loans, travel and holiday loans, wedding loans, medical fees loans, solar renewables loans, family law loans, new car loans, used car loans and refinance.

Society One

Society One is an Australian marketplace lender. It enables to match investors fund with high-quality borrowers, thus allowing investors to receive a better rate of interest compared to the banks.

The lender notes that the business has equalled the investor funds with 35k customers since starting in 2012, having scaled from a small start-up to an industry-leading P2P lender. The firm has recently passed $800 million milestone in the loan amount, and now it aims to reach $1 billion by 2021.

Its products include debt consolidation loans, wedding loans, student loans, holiday loans and car loans. Some of the eligibility criteria include the borrower being at least 21 years old and having an income of over $30k per annum, which may consist of Centrelink.

The applicant must be an Australian citizen or a permanent resident, with a good credit history and should be utilising the loan for personal purposes.

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