P2P Financing: When Is It Right for Your Business?

Tired of waiting on bank loans or unwilling to give up equity? P2P financing might be the answer for your business.

Peer-to-Peer (P2P) financing has emerged as a game-changer for SMEs, providing accessible funding for short-term needs like working capital and growth initiatives. In this episode of P&L, Chai Kien Poon, Country Head of Funding Societies Malaysia, breaks down how P2P financing works, when it’s the right choice, and its place in the broader SME financing ecosystem. We also explore cost structures, risks, and how institutional partnerships are fueling the growth of P2P financing in Malaysia.

Key highlights from the conversation include:

- How P2P Financing Differs: A comparison with bank loans, venture debt, and equity crowdfunding.

- Common Use Cases: Examples of how Malaysian SMEs leverage P2P financing.

- Cost vs. Benefits: Understanding the cost structure and why SMEs opt for P2P despite higher annualised rates.

- When to Choose P2P Financing: Insights into identifying the right circumstances for P2P financing.

- Institutional Partnerships: The significance of collaborations with SME Bank, TERAJU, HSBC, and Maybank.

- Application Process: Steps from application to fund disbursement, including key approval factors and risk evaluation.

- Avoiding Pitfalls: Common mistakes businesses make with P2P financing and how to avoid them.

- Best Practices: Strategies for leveraging P2P financing effectively to drive business growth.