Peer-to-peer and marketplace business loans: how they work now

A decade ago, peer-to-peer lending was the new idea in Australian business finance. Everyday investors would fund small business loans directly through a website, cutting out the bank and sharing the margin. Some of that promise held up. Much of it didn’t, and the market in 2026 looks very different from the headlines of 2015.

If you’ve come across the term while searching for a business loan, this page explains what the model is, what’s changed, and the handful of questions that matter more than whether your money comes from “peers”.

How marketplace lending works

ASIC prefers the term marketplace lending, because “peer-to-peer” isn’t a defined legal term. Its guidance describes a set-up where retail or wholesale investors fund loans to consumers or businesses, with an online platform matching loan requests to investment money. Several investors may share a single loan.

For a business borrower, the flow is simple:

1. You apply online or through a broker.
2. The platform assesses your business: bank statements, turnover, credit history, sometimes financials and security.
3. The platform assigns a risk grade and sets the price.
4. Investors fund the loan, either by choosing it directly or by being matched automatically through a fund.
5. You receive the money and repay the platform, which passes payments on to investors.

Behind the scenes, the most common Australian structure is a managed investment scheme. ASIC notes that a custodian may hold the loans and act as the lender on record, with the platform operating the scheme. That detail matters if anything ever goes wrong, which we cover below.

What changed in the Australian market

The model hasn’t vanished, but it has thinned out and changed shape:

• Investor sides have closed. TruePillars, one of the country’s early business marketplace lenders, says on its website that its investment trust closed on 30 June 2026 and investor capital was returned. Its lending products continue. Our TruePillars profile has the detail.
• Institutional money has replaced retail investors. Several platforms that started by taking money from individuals now fund loans through warehouse facilities from banks and institutional investors. To the borrower they now look much like any other non-bank lender.
• Wholesale-only models remain. Some lenders still match businesses with sophisticated or wholesale investors, particularly for larger, secured loans. These are often arranged through brokers rather than advertised openly.

So “peer-to-peer” in 2026 is less a product category and more a funding method. The loan you sign is an ordinary business loan.

Does the funding source matter to you?

Mostly, no. What matters is the contract in front of you. Compare a marketplace offer exactly as you would any other:

Item	What to look for
Total dollars repaid	The cleanest way to compare offers with different fees, terms and repayment frequencies
Establishment and other fees	Platforms often charge a borrower fee on top of the investor return
Repayment frequency	Weekly or daily debits feel very different from monthly repayments in a lumpy month
Security	None, a charge over business assets, or a mortgage over property
Personal guarantees	Nearly universal for small business loans of any type
Early payout	Whether paying off early saves you interest or whether the full cost is locked in

Our loan cost comparison calculator puts two or three offers side by side in dollars.

Want a second opinion on an offer? Tell us about it. It’s a short form, and nobody pulls your credit report at that point.

Two questions only a marketplace borrower needs to ask

1. Who is the lender of record? It may be the platform’s company, a custodian or a trustee. That’s the entity you legally owe, and it’s the name that should appear on your loan contract and any security registration.

2. What happens if the platform stops operating? Your loan survives. A loan contract doesn’t end because a platform closes or changes model. Ask the platform who would collect repayments if it wound up (a backup servicer, the custodian or a trustee) and get that answer in writing, and if the platform ever changes hands, keep paying as agreed while you confirm the new payment details.

What lenders look at

Marketplace lenders assess businesses much like fintech and non-bank lenders do:

• Trading history, usually at least a year, often two for larger amounts.
• Turnover and bank statement conduct, including dishonours and existing loan repayments.
• Credit files for the business and directors.
• Security for bigger loans: property, business assets or both.
• Purpose, because investor funds often come with eligibility rules about what loans can be made.

If you’ve already applied to several lenders, be careful: a run of credit enquiries can count against you. The reasons are set out in our guide to too many credit enquiries.

Pros and cons

Possible advantages

• Another pool of capital beyond banks
• Some platforms take on loans that fall just outside bank policy
• Online applications and reasonably quick decisions
• Wholesale-investor platforms can fund larger, more complex secured deals

Drawbacks

• Usually dearer than a bank loan
• A much smaller field of active platforms, so less choice
• Availability can depend on investor appetite at the time
• Fee structures can be harder to read than a bank’s

Alternatives that do the same job

• A bank loan if you fit the criteria. Banks are usually the cheapest money available, and it’s worth a proper conversation with yours first. Compare with fintech lenders vs banks.
• Unsecured business loans from fintech lenders for amounts sized on turnover.
• Property-secured loans where you have equity, which often cost less in total than an unsecured loan.
• Invoice finance if your problem is slow-paying customers rather than a need for a lump sum.

Looking for a lender rather than a platform?

Plenty of business owners search “peer-to-peer” because they want an alternative to the bank. That’s sensible, and the alternatives today are mostly specialist non-bank, fintech and private lenders who fund from their own or institutional money.

Telling us what you need takes around sixty seconds. Asking is free and invisible to credit bureaus. You won’t be put on a list that gets sold around, so there’s no flood of calls. An experienced person reads your enquiry, matches it against the lenders that actually fit, and gets in touch. Fill in the turnover, amount and purpose carefully, and the first option we raise should be one that genuinely suits you.

Find a lender that fits →