For many small and medium-sized businesses in Australia, accessing finance through traditional banks has always been a challenge — slow approval times, strict credit requirements, and lots of red tape. But in recent years, fintech lenders and peer-to-peer (P2P) platforms have reshaped the lending landscape, offering faster, more flexible funding options to businesses that don’t fit the big bank mould.
If you’re exploring alternatives to conventional small business loans, this guide explains how fintech and P2P lending work, and what you should know before jumping in.
Table of Contents
- What Is Fintech Lending?
- What Is Peer-to-Peer (P2P) Business Lending?
- Why SMEs Are Turning to Online Business Loans
- Pros and Cons of Fintech and P2P Lending
- Should You Consider a Fintech Loan for Your Business?
- Work with a Broker to Compare Your Options
What Is Fintech Lending?
Fintech (financial technology) lenders use online platforms, automated risk assessments, and non-traditional data to offer business finance faster and with fewer barriers than traditional lenders.
In Australia, major fintech business lenders include:
- Prospa
- Moula
- Capify
- Lumi
- OnDeck
These lenders typically offer unsecured business loans, invoice finance, and lines of credit with approval times as quick as 24–48 hours.
What Is Peer-to-Peer (P2P) Business Lending?
Peer-to-peer (P2P) lending is a model where investors (individuals or institutions) fund loans directly to businesses through an online platform — cutting out the banks entirely.
In Australia, leading P2P business lenders include:
- Marketlend
- SocietyOne
- Plenti (formerly RateSetter)
P2P platforms assess your application and match you with investors willing to fund the loan. You repay the loan just like you would with any lender — but interest rates may vary based on your risk profile.
Why SMEs Are Turning to Online Business Loans
SMEs are increasingly choosing fintech and P2P lending over bank finance, and it’s easy to see why. These alternatives offer:
- Faster application and approval — some lenders assess applications in hours
- Less red tape — minimal paperwork, especially for unsecured loans
- More inclusive criteria — focus on cash flow and trading history, not just credit score
- Flexible repayment terms — weekly or daily repayments suited to business cycles
- Tailored products — like invoice finance or equipment loans
This shift is especially helpful for time-poor small business owners who want a simple, digital-first way to access funds.
Pros and Cons of Fintech and P2P Lending
✅ Pros
- Speed – Get funded in as little as 1–3 business days
- Accessibility – Options available for startups, sole traders, and low-credit-score businesses
- Transparency – Clear terms and online dashboards
- Convenience – Entire process handled online, 24/7
❌ Cons
- Higher interest rates – Especially for unsecured or short-term loans
- Lower loan amounts – Compared to traditional secured loans
- Shorter terms – Often 3 to 24 months
- Limited flexibility on repayment schedules – Fixed repayment schedules may not suit all business types
While these lenders offer speed and simplicity, it’s important to understand the full cost of borrowing — especially if you’re comparing to traditional or secured options.
Should You Consider a Fintech Loan for Your Business?
Online business loans can be a great fit if you:
- Need fast funding for a short-term opportunity or cash flow gap
- Can show regular income or strong daily/weekly revenue
- Don’t have property or equipment to use as collateral
- Want to avoid long application processes or strict bank criteria
They may not be ideal if you need long-term finance at the lowest possible interest rate — in that case, a secured loan through a broker may be more cost-effective.
Work with a Broker to Compare Your Options
With so many fintech and P2P options available, it can be hard to know which lender — or type of loan — is right for your business. That’s where a finance broker like Capital Plus Finance comes in.
We help small businesses across Australia navigate both traditional and online lenders, including fintech and P2P options. Whether you’re looking for fast approval, equipment finance, or a better way to manage cash flow, we can match you with a solution that fits your needs and budget.
👉 Talk to Capital Plus Finance today for personalised advice on small business loans — including fintech and P2P options.
About Capital Plus Finance
Based in Sydney and working with SMEs nationwide, Capital Plus Finance is a trusted equipment finance broker and business lending expert. With access to over 40 lenders — from major banks to cutting-edge fintech providers — we help businesses secure finance that works. Learn more at capitalplusfinance.com.au.
