Definition:
Peer-to-peer lending is a method of raising capital for a small business that is similar to crowdfunding in that an entrepreneur will use the Internet to solicit financial support his or her project, and supporters will pledge relatively small amounts of money. The big difference, however, is that loans received through peer-to-peer lending must be paid back to the lenders with interest.
Also Known As: Peer-to-peer loans, person-to-person lending
Examples:
Becky was having difficulty being approved for a loan by her bank, so she joined a peer-to-peer lending club and pitched her startup to a group of potential supporters with the hope that she would receive the financial support she needed.
