Private Debt Markets
Private debt financing provided by non-bank sources, such as institutional investors, pension funds, insurance companies, and high net worth individuals. It includes various types of debt instruments, such as corporate bonds, private placement loans, and mezzanine debt, which are issued by private companies, real estate projects, or infrastructure projects. Private debt typically offers higher yields and longer terms than traditional bank loans and is often used as a way for companies to access capital for growth and expansion. Unlike public debt, private debt is not publicly traded and is often subject to less regulation and disclosure requirements. The private debt market has grown tenfold in the past decade, and has expanded to $1.4 trillion, up from $250 billion in 2010, according to data provider Preqin, with funds including Ares, Blackstone (BX. N) and KKR (KKR. N) holding big positions.
Peer-to-Peer
P2P is the fastest growing form of private debt. Peer-to-peer (P2P) loans are a form of debt financing that allows individuals to borrow and lend money without the involvement of traditional financial institutions. In P2P lending, individuals can act as either borrowers or lenders and connect with each other through an online platform. Borrowers can apply for loans, and lenders can fund the loans, often with more favourable terms than those offered by traditional banks. P2P lending can be safe if certain precautions are taken, but it also carries some risks. Here are a few things to consider:
Security of funds:
P2P platforms should have secure systems in place to protect the funds of both borrowers and lenders.
Creditworthiness of borrowers:
P2P platforms typically perform a credit check on borrowers to assess their creditworthiness, but there is still a risk of default.
Diversification:
To minimise the risk of default, it is recommended to spread investments across multiple loans, rather than investing a large sum in a single loan.
Regulatory environment:
P2P lending is subject to government regulations, and the regulations can vary depending on the jurisdiction. It's important to make sure the P2P platform operates in a regulatory environment that provides adequate protection to lenders.
In most cases, anyone can participate in peer-to-peer (P2P) lending, either as a borrower or as a lender. However, the exact requirements to participate can vary depending on the jurisdiction and the platform. For borrowers, the requirements can include minimum age, residency, income, credit history, and other factors. The exact requirements will depend on the platform and the loan type, and some platforms may have more stringent requirements than others. For lenders, the requirements can include minimum age, residency, and the ability to transfer funds to the platform. Some platforms may also have restrictions on the amount that can be invested, and may require proof of identity and income.
It is important to research the specific requirements and eligibility criteria for each platform before participating in P2P lending, and to seek professional advice if necessary.
With growing popularity in Switzerland, Swisspeers takes centerstage.
They are an independent online platform giving small and medium sized enterprises (SME’s) direct access to business loans financed by investors. This creates an alternative to traditional bank loans. Swisspeers offer investors the opportunity to invest directly into SME’s as a new alternative fixed income investment with an attractive risk-return profile. They build trust and confidence between the parties through a thorough credit assessment process, transparent pricing on their marketplace, as well as customer centric portal functionality for both the SME's and the investors.
The financing platform of the Swiss fintech start-up went live in 2016, and since then thousands of investors have financed more than 600 companies with over CHF 130 million and earned interest.
As a Splint Invest customer, you will be granted Gold status for the first 12 months, which means you benefit from a particularly advantageous fee model. Follow the link and the instructions and save up to ⅓ of all Swisspeers fees.
