Peer-to-peer Finance, sometimes called P2P Finance, or Crowdlending is the practice of borrowing or lending money in a safe and regulated online environment between individuals or businesses. It is performed by platforms such as Flender that match lenders with approved borrowers, and create legal contracts between the parties.
Since peer-to-peer lending companies operate online, they can run with lower overhead and provide the service more cost-effectively than traditional financial institutions such as high-street banks.
As a result, lenders can earn higher returns, while borrowers can borrow more conveniently and at their preferred interest rate.
Flender is open to any individual, group or business who wishes to secure funding.
Lenders can be resident anywhere in the world.
Borrowers who create Flender campaigns need to hold residence in Ireland. Anyone that meets the affordability and credit check requirements is eligible to launch a campaign on Flender. In order to create a campaign, the borrower must meet the following requirements:
All borrowers go through affordability and credit checks before their campaign is eligible for participation. A successful campaign requires signed contracts by all parties before proceeding.
Getting started on your funding journey is easy. Just click “Get started” anywhere on the website, to register. Once registered you can begin creating your profile. We recommend that any new user read our User Guide to creating a successful Flender campaign.
The amount that you wish to borrow, interest rate and repayment period is chosen by you. For consumers, the limit is 25,000. For businesses it is 100,000. * All borrowers are subject to affordability and credit checks to ensure that you are financially able to meet the loan repayments.
No, it’s free and there are no associated costs with setting up a campaign on Flender.
Flender does not charge any fees to users. Business borrowers pay a small success fee based on completing a campaign successfully on the Flender platform. Please contact us for more information if you are a business interested in raising on Flender.
You have control over who will receive an invite to participate in funding your campaign, therefore you control the potential lenders. Once your campaign is approved, you can invite potential lenders from your existing social circles (including customers if you are a business owner) to view and back your campaign.
If your campaign did not meet your hoped-for funding target don’t worry, you have two options:
You can promote your campaign either privately or publicy depending on your preference. The first channel should be through your own email contacts using the invite template provided, or through social networks or other online channels you use. You can limit the campaign to followers of your online social profiles, or open it up to any viewer. Once your campaign is set up and live, you will receive a unique URL which you can use to send out invites and allow potential lenders to view your campaign page.
Any person can be a lender on Flender if you must meet the following criteria:
The percentage that we show as potential return is the annual interest rate that is charged on a decreasing balance loan.
For example if you lend a Borrower €10,000 at a 10.48% interest rate over 48 months the monthly repayments to you will be €255.94.
So you will get back €12,284.99 in total (i.e. a return of €2,284.99, or 23% of the loaned amount). Dividing that 23% by four years gets to 5.7%, but that 5.7% is not a rate of return, because it's not compounded.
In order to achieve an annual rate of return of 10.48%, you'd simply reinvest the monthly repayments from this loan into other loans, and then also get the benefits of compound interest.
On Flender, you can lend to limited companies, sole traders and partnerships, who are looking for loans of between €1,000 and €100,000 and to individuals who are looking for loans between €1,000 and €20,000.
We review each potential borrower and only allow them to borrow if they have successfully completed affordability and credit checks. All business loans are secured with directors’ personal guarantees.
We evaluate each borrower based on credit info from Equifax, analysis of cash flow and VAT returns where applicable.
Unlike other marketplaces we have an additional level of underwriting based on the borrower’s peer group trusting them and lending them money. This is unique to Flender.
First, register as a lender on Flender. Second, choose the campaign that you would like to lend to and transfer your funds.
There are two main ways you can lend on Flender:
Flender does not charge any fees to lenders.
We understand that this is your money, not ours. The available cash that you have is held in a segregated Lenders funds account. Flender manages these accounts in line with best practice. The account does not form part of Flender’s assets. Where you lodge funds to your Flender account, we will ensure the safety of your money by putting in place structures and controls consistent with Client Monies regulations.
It is important to remember that with all lending there is an element of risk. Some borrowers may not be able to fully repay their loan. If this happens, the loan becomes known as a bad debt.
All of our borrowers undergo a rigorous credit evaluation process before they post a loan request on Flender.
This process includes the following checks:
Our experienced underwriters review every application in full before it can be posted on Flender.
We advise all lenders to spread their money across multiple campaigns to reduce their risk. By lending only a small proportion of each business loan, you reduce your exposure.
Flender does everything necessary to ensure each borrower is who they say they are and does exactly what they say they do.
We to carry out comprehensive identity and credit checks on borrowers who want to borrow on Flender.
The first repayment you get from a borrower will usually arrive within a month of you lending to them.
You will see your funds in your Flender account and you can withdraw them when you wish or reinvest and earn compound interest.
Yes. Any money you get from borrower repayments is automatically added to your available cash fund. Therefore, you can use it to lend to other borrowers. This allows you to harness the power of compound interest and maximise your returns.
You can withdraw any money in your lender account that you have not currently lent out. For your first withdrawal, we require proof of identification before we can release your funds. The following items are accepted:
We have developed a comprehensive debt recovery program with a third-party collections agency to manage any defaults on payments by borrowers.
Borrowers who have defaulted will be pursued where possible. Any money recovered will be forwarded to the lenders. The borrower will have to meet the costs of recovery – this is a condition of their loan. If there is a shortfall, all the lenders to that borrower will share the cost of it on a pro-rata basis.
If a borrower chooses not to accept the offer of a loan, we will return the amount to your account as soon as we process the transaction.