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R. Bruce Morgan and Krista Morgan founded P2Binvestor in 2012 and officially opened its virtual doors in 2014. In the beginning, it was essentially a factoring company. Companies provided their unpaid invoices to obtain financing.
Now it offers other types of asset-based lines of credit. Companies can secure business lines of credit with both accounts receivable and inventory.
P2Binvestor is a niche lender. It is geared toward businesses that are too large to be considered “small” but are yet to be established enough to secure small business loans from a bank. The businesses might not have enough revenue or still be too new to secure a bank loan.
This lender partners with both private investors and banks to provide lines of credit to companies. Users typically begin with private investors and transition to bank loans down the road.
P2Binvestor also builds technology to manage lines of credit. All P2Binvestor customers have access to this technology.
How Does It Work?
P2Binvestor offers investor-backed and bank-backed financing. To qualify, businesses must:
- Have at least 12 months in business
- Earn at least $500,000 a year
- Have a majority of B2B customers
- Be based in the United States
- Have United States- or Canada-based payers
While these are general requirements, they aren’t set in stone. All business owners are invited to apply for a loan. That’s even true for companies with poor or no credit. These loans are backed by assets instead of secured with credit scores.
After applying online, business owners are contacted by a representative from P2Binvestor. The rep goes over the loan options and the assets needed to secure the loan. A personal guarantee might be required as well.
Those who secure a loan receive a line of credit they can access at any time. In addition, P2Binvestor creates a bank account for the borrower’s assets. The revenue from all assets is diverted into the bank account.
When the money goes into the account, P2Binvestor uses it to pay off outstanding debts with the lender. If there aren’t any, the money goes straight to the borrower’s business bank account. This happens quickly, so borrowers have close to immediate access to their revenue.
Benefits of P2Binvestor
P2Binvestor makes it easier for companies to get financing that normally wouldn’t qualify. Also, as companies grow, they can transition to a bank loan with P2Binvestor. This allows companies to establish themselves with banks without leaving the P2Binvestor family.
It’s also scalable. As businesses grow, the amount they borrow can grow as well. Once approved for a loan, businesses can also go back and get additional funds without going through the application process again. This gives companies the option to secure funding as needed.
P2Binvestor is also very transparent. It provides users with details of the loan upfront, so there aren’t any surprises or hidden costs and fees. This is good news for borrowers who’ve ever been surprised when taking out a loan.
It also offers a solid customer service network. Phone, email, and live chat support are available, and users just need to fill out a short questionnaire to set up an appointment with a lending specialist. Getting help is quick and easy. Some peer-to-peer networks have poor customer service, so this sets P2Binvestor apart from its competition.
There are costs associated with any type of loan, and P2Binvestor’s loans are no different. Consumers borrow between $250,000 and $10 million and pay an origination cost of 1.5 percent.
Interest rates are in the high teens on these loans, and the term length is one-year revolving. Interest is charged every day and is non-compounding. The lender does not offer information about the APR.
Consumers only pay interest on the amount of the loan that’s outstanding. They receive a line of credit, and if they don’t draw from the line, they don’t owe interest. For example, if someone has a line of credit of $50,000 and only draws $10,000 of it, he or she only pays interest on the $10,000.
An additional fee is charged for terminating the contract early. The fee is waived for those who move to a bank line of credit with the company.
While it is difficult for some businesses to meet P2Binvestor’s requirements, those who do are able to get much-needed financing. The process is transparent and easy to use, and the rates are competitive for the P2P lending industry.
Borrowers also have the option of graduating to a bank loan. Then they can build their company’s credit while getting even lower interest rates.
This is a good option for companies that need money but can’t get it from a lender. It’s much more transparent than other P2P lenders, and initial reviews have been positive.
Author: Jeff Gitlen