WHO ARE THE ALTERNATIVE BORROWERS?
Companies with credit scores between 601 and 700 comprise about half of alternative lending deals arranged by online lending resource Biz2Credit in 2014.25 As seen in Figure 2.10, companies ranging between 651 and 750 received most of the successfully funded loans by number: about 31 percent.
Businesses with a credit score of between 701 and 750 received most funding, about 35 percent of the total amount. Those with higher credit scores had easier access to financing. Those with the highest credit scores are rarely using online lending platforms. They can get less expensive loans from established banks and credit institutions.Figure 2.11 shows that most borrowers use their marketplace loans for loan refinancing and credit card payoff.26
FIGURE 2.11 Uses of marketplace loans
Data source: Gartner Research
2.9
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