If this is the question you are grumbling with, then the answer is a resounding ‘yes!’ You can start the business via peer-to-peer lending due to its many benefits, such as flexible terms, convenient applications, lower interest rates, and more.
For you to make a useful decision, you need to consider the benefits that your choice will have on your new startup and the demerits as well. Once you do that, apply if you are satisfied with the terms as you continue to fine-tune your business plan.
Here are the benefits that you will gain if you open your café via peer-to-peer lending.
Fast and Convenient
P2P companies often handle all their application processes online. This means that you can apply in the comfort of your house or office. Also, you will not have to queue for hours to be served.
Remember, if you choose an established peer-to-peer lending group like My Instant Offer, you will get an investor, as the name suggests, instantly. These types of lenders with an excellent reputation in the industry have a waiting list of investors to give loans to business-minded people like you. They know you have a great idea and will be willing to pay the loan so as to qualify for a larger loan that will help you to climb the business ladder higher.
You can visit myinstantofferclub.com site right away from wherever you are to see the products that they offer. If you are interested, start the application process now to increase your chances of launching your café as soon as this week.
Lower Interest Rates
As an entrepreneur, you truly need lots of money to start and keep your business going, especially at the initial stages. So, the type of loan that you apply for should be affordable.
P2P loans always have low-interest rates because the companies deal with limited overhead costs. Others, such as banks and building societies, use much of their money to pay huge rents and their staff who manage the money.
In this case, the firms operate online, making it possible to reduce the amount to be used to pay rent significantly. Moreover, the borrowers will deal with you directly. This will eliminate the need to employ several people to oversee the movement of the funds.
Safe Credit Score
Unlike in the case of the traditional financing sources, your credit score remains secure when you get a personal loan quote. As such, you can get the right information on the rate offered and other important factors about the loan.
Most credible P2P companies know what matters to you most. They only perform a ‘soft search’ to prevent other service providers from knowing that you are doing these searches. In this way, if you want to prepare coffee to serve your customers, you can establish the exact amount that you will spend on the recipe in advance. The best news here is that you can do this without compromising the worth of your credit score.
Things are Simple
While individual investors will finance your loan, you have small roles to play. You will not look for customers or make many arrangements. Once you submit your requests, several investors will fund it. You will then simply accept the terms of the loan and go to your bank to withdraw the money. Thus, you will get enough time to focus on the activities that have a direct relation to the future profitability of the business.
You also need to consider the cons of P2P loans.
High Default Risks
P2P platforms offer unsecured loans, and lenders have no tools to make sensible financial decisions. In case a borrower writes a touching story, he or she may win the hearts of many of them and get the loans. What if you are the one with the story but have no financial ability to repay? You may get the loan but face the consequences of poor credit ratings should you default.
Some P2P lending sites do not charge interest. However, many others do. They also want borrowers to pay closing or originating fees. The amounts you will pay have a direct relation with your credit score, which means you can be forced to spend a lot if your rating is undesirable.
Lack of Privacy
When you post your loan request on the Internet, many of your friends on the platform will likely see it. This may not be the best thing for you if you want to keep your plans to yourself. So, the lack of privacy can discourage some people from using these platforms.
The Final Thought
As you can see, peer-to-peer lending offers you the best platform to get the funds for your café. You will not waste a lot of time doing any paperwork. This option also allows you to know what you are qualified to get before you make your final decision. Though there are some drawbacks, it can help you in a big way. Nothing on earth is perfect, and neither is P2P lending. Depending on your financial strength, you can go for it if you need a flexible unsecured loan.