Develop A Crypto Peer to Peer Lending Software To Empower Businesses

Small, medium, and big organizations always need extra funding to ensure consistent growth of their businesses. They have to rely on loan providers, whether banks or financial services. They utilize the borrowed money for the following reasons:

• Buying new assets
• Hiring new employees
• Launching new products or services
• Business expansion
• Providing training to employees

When the need for funds arises urgently, won’t it be beneficial for SMEs to use a crypto Peer to Peer Lending Software to get instant assistance? Continue reading to learn about how FinTech is benefitted from Peer to Peer Lending Platform Software and how it is helpful in filling the gaps that remain uncovered by traditional banking systems. 

Why SMEs Are Moving Away From Traditional Banks?

Traditional banks require SMEs to complete a series of paperwork. As of now, banks are providing online services to their customers, which has made it comparatively easier for businesses to apply for loans, but it’s still time-consuming to fill out the necessary documents and get approval for loans. Thus, businesses will like to give preference to the use of crypto P2P Lending Software for finding quick assistance. 

Here are some shortcomings in the traditional lending-borrowing processes:

• Time-consuming Loan Approval
  A bank will be required to assess the loan application, perform necessary verifications, and check the borrower’s credibility. This is a complex and lengthy procedure, which slows down the progress of SMEs. 
• Hidden Costs
  There are many hidden costs in the bank loan approval process that borrowers may remain unaware of from the beginning. Thus, it feels disappointing to pay when they are actually in need of money. 
• Forceful Debt Recovery
  Banks use aggressive methods for loan recovery. SMEs find it risky and hesitate in applying for loans.
• Borrowers Need To Deposit Security
  Banks implement strict security rules that become hard for SMEs to handle. Similarly, financial organizations also expect borrowers to make a security deposit while applying for a loan. 

How Peer-to-Peer Lending Software Brings A Change?

As the trend of cryptocurrency is growing, it has resulted in the evolution of Peer to Peer Lending Platform Software that is backed by decentralized blockchain technology and smart contracts. It has opened new avenues for accessing financial help from the crypto community and ending sole dependence on the traditional banking infrastructure. 

P2P Lending Software users are able to enter a loan agreement without involving any intermediaries. Rather, the self-executable smart contacts make it easier for lenders and borrowers to complete the transactions with complete trust and transparency. However, the requirement of collateral is one thing in similar in both, fiat-based loans sought through the banks and crypto-based loans sought through the P2P networks. When the borrower applies for a loan, the maximum amount that can be approved depends on the amount of collateral. Lenders get a fixed rate of interest from the borrower for the money provided. When we use crypto P2P Lending Software, the loans are automatically approved once the terms and conditions are fulfilled. 

Crypto-banked loans are processed without involving intermediaries, which lowers the processing costs, shortens the settlement period, and helps to fulfill the needs of SMEs immediately. Thanks to the technologists who have been building Peer to Peer Lending Platform Software with amazing features and functionalities. 

Benefits of Using A Peer to Peer Lending Software

It’s beneficial for SMEs to use P2P crypto lending platforms for arranging funds. Let’s find out how!

• Lower Interest Rates
  The rate of interest in crypto landing scenarios in comparatively less than the banks or the other financial institutions.
• Quick Loan Approval
  P2P Lending Software facilitates faster approval of loans, contrary to traditional lending institutions.
• Greater Transparency
  Blockchain helps to have greater transparency while processing loan transactions and makes it easier for SMEs and lenders to track their transaction records.
• Ease of Access:
  Anyone using an internet connection or a Peer to Peer Lending Platform Software can apply for a loan, without any need to provide proof of good credit record.
• Security
  As well-audited smart contracts automate lending and borrowing processes, it ensures complete security. It also eliminates the chances of fraud or human errors. 

Centralized Vs Decentralized P2P Lending

Cryptocurrency is not always managed through decentralized networks. There are some FinTech companies like BlockFi, Celsius, and SALT that have centralized P2P Lending Software and play a similar role as a traditional bank or financial service provider. They follow KYC (Know Your Customer) protocols, keep your crypto assets under their custody and act as a middleman between the crypto and fiat currency ecosystems. These organizations create their own set of rules for lending money & setting interest rates and often avoid the usage of smart contracts. 

On the other hand, decentralized lending focuses on offering crypto loans through the blockchain, without involving any intermediary. The Peer-to-Peer Lending Platform Software users can apply for a loan directly using the mobile app, through the decentralized platform. It is managed with the help of smart contracts. 

Popular Decentralized Lending Borrowing Platforms

• Compound: It’s an Ethereum-based algorithmic decentralized platform that allows lending against collateral and earning interest in lieu.
• MakerDAO: It’s a Decentralized Autonomous Organization, built on Ethereum. It helps users to obtain DAI tokens (stablecoin) through CDP (Collateralized Debt Position). These tokens can be lent to earn interest.
• dYdX: It’s a unique lending-borrowing platform built on a decentralized Ethereum blockchain, which also allows margin trading.
• DeFi Swap: It’s a decentralized exchange that also enables users to lend money and generate a lucrative APY on their idle tokens. 

All the above-mentioned Peer-to-Peer Lending Platform Software platforms provide lending access to users, without completing KYC documentation or involving any centralized custodial intermediary. All transactions are managed through smart contracts, and a decentralized governance system helps to fix interest rates automatically. Variable interest rates can also be implemented using P2P Lending Software functionalities. This facility has made a considerable impact on the process of lending borrowing using technological advancement in the cryptosphere. 

Future of P2P Crypto Lending

It has a promising future. Here’s why:

• Growing Popularity of Cryptocurrencies
  As the mass adoption of cryptocurrencies is increasing, the demand for crypto P2P lending platforms is expected to increase in the times to come. It enables the users to leverage the advantage of blockchain features like faster transaction speed, low costs of transitions, and tighter security.
• Integration of Decentralized Finance
  DeFi is focused on providing financial services, such as trading, lending, and borrowing, in the absence of a middleman. Peer to Peer Lending Software is integrated with the DeFi ecosystem and enables users to get easy access to a variety of financial services.
  
• Ensured Security & Transparency
  With the evolution in technology and better smart contract audit facilities, SMEs will find it easier to arrange funds for their instant needs through a transparent blockchain-based P2P network. 

Final Thoughts

The evolving technology behind the development of Peer to Peer Lending Software apps acts like a game changer in the financial industry. There are numerous benefits to using such apps, which includes quicker loan processing, greater transparency, lower fees, low-interest rate, and easy access to lenders. 

Peer to Peer Lending Platform Software helps to automate the loan approval process, as it uses smart contracts. This is what makes the P2P lending platform becomes more reliable and efficient. Are you feeling interested in creating such P2P Lending Software that can help businesses? Connect with the experts at Antier, the blockchain master.