P2Bi Crowdfunding Hits $50M SME Loan Milestone

If anyone has doubts about the rise in popularity of alternative small business financers, one only has to look at the numbers. Crowdfunding platform P2Binvestor, for instance, has just released its own figures after hitting a significant SME financing milestone.

According to a press release offered Wednesday (March 18), P2Bi has officially funded $50 million worth of invoices since its launch last May, less than one year ago.

According to P2Bi CEO and co-founder Krista Morgan, achieving this milestone is a reflection of the health of the alternative financing market. “Exceeding $50 million in purchased invoices in 10 months is a huge achievement for us,” she said. “It speaks volumes about the market demand for our product and the hard work of our amazing team.” Morgan added that she expects this type of expansion to continue in 2015 thanks to the launch of new P2Bi products. Among those new services, said reports, is its first revolving line of credit for SaaS startups.

P2Bi hosts a platform of investors funding each of its credit lines, the company explained. The platform’s crowdfunding business model reduces the cost of capital and allows the firm to offer more flexible loan terms. The business finances up to $5 million for each client, and that cash is most often secured through accounts receivable and future incoming contractual revenue.

Crowdfunding and peer-to-peer financing has taken off in recent years, not only in the U.S. but across the globe, especially Europe and the U.K. For the EU, authorities are working to boost economic growth by propping up small- and medium-sized enterprises. That goal, reports say, has forced officials to take a look at how crowdfunding working capital services can facilitate economic expansion. In a recent green paper published by the European Commission, policymakers noted alternative financing as a crucial method to fund SMEs, facilitate cross-border transactions and secure foreign investment.

Not everyone is convinced of the alternative lending hype, however. The U.K. Treasury released a report earlier this month that highlighted several potential downfalls of the method for businesses to access working capital, though agreed that for some businesses, P2P lending is the right option.