Glossary of Alternative Lending Terms

When discussing alternative lending or finance solutions you may find that you come across terms you’ve not heard before – below is a list of commonly used phrases and terms in this sector.

For a more detailed explanation of any of the below, or to discuss anything around alternative lending, please call our lawyers now on 0345 872 6666.

Widely used alternative finance terms

Peer-to-peer lending – also known as P2P lending. Peer-to-peer lending is defined as the lending of money between two individuals or peers, bypassing traditional methods like bank lending. P2P lending can take place online and individuals using the services can offer and receive unsecured personal loans.

Crowd funding – crowd funding is funding raised through a collective pool of people, often with the same goals in mind. Crowd funding is often used to raise funds for a cause, a campaign or to begin a company. It is also a popular option for creatives looking for funding for art, music or independent film projects.

Social enterprise – social enterprises are projects which, instead of being set up to turn a profit, are established to benefit a community in a social sense, whether it is to regenerate an area or build a new village hall. Investors can still withdraw funds for financial gain, so long as the company’s main focus remains social.

Financial Services Authority – the Financial Services Authority is the UK’s financial regulator. It sets rules for the financial sector and investigates cases of fraud or other financial wrongdoing. The FSA is accountable to the Treasury. The FSA is due to be replaced in with two bodies in April 2013: the Prudential Regulation Authority and the Financial Conduct Authority.

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