P2P Lending Options for Non-Accredited Investors in Singapore

P2P lending is quickly emerging as a popular financing option for startups and small and medium enterprises (SMEs). But what is P2P lending? In a nutshell, P2P lending stands for peer-to-peer lending, a financing method that allows investors to lend their money to businesses in exchange for interest as repayment. This provides more flexibility for business owners to acquire loans as compared to the traditional method of borrowing from banks.

As for the investors who are interested in putting their money into companies, P2P lending is also a great form of investment with high returns. That said, some individuals may have concerns about investing with P2P lending due to their limited net worth. Well, the good news is that there are plenty of P2P lending options for non-accredited investors in Singapore.

What is a non-accredited investor?

Before we go any further, a non-accredited investor, also known as retail investors, refers to those who do not meet the requirements or income threshold of what it takes to be an accredited investor. In Singapore, the requirements for an accredited investor are determined by the Monetary Authority of Singapore (MAS).

 

To qualify as an accredited investor in Singapore, individuals must fulfil at least one of these three criteria:
1. Have an annual income in the preceding 12 months of at least S$300,000

  1. Have net financial assets of at least S$1 million in value
  2. Have net personal assets exceeding S$2 million in value, of which the net value of the individual’s primary residence can not exceed S$1 million

 

How is it different from an accredited investor?

Aside from the obvious difference in net worth, there are not many major characteristics that separate accredited investors from non-accredited investors. To put it simply, being a non-accredited investor does not mean that individuals are not eligible to invest, but rather, the investment options for them may be different or less than those that are available to accredited investors.

 

In some cases, non-accredited investors may have to pass more regulations on the disclosure and documentation of the investments that are available to them. So what can non-accredited investors invest in? At the end of the day, they are still free to invest in equities, real estate, and of course, P2P lending.

P2P lending options

When it comes to P2P lending options, there are plenty of available platforms in Singapore that are regulated by the MAS. Among them is Funding Societies, a platform which allows investors to invest as little as $20 while businesses can stand to get up to $3 million in loans.

Meanwhile, Minterest is another P2P lending platform that offers a minimum loan amount of $50,000 for borrowers while lenders are required to invest a minimum of $500. Based on the P2P lending company, each organisation would have their individual interest rates and fees to attract different individuals and businesses.

 

What is SmartFunding?

Founded in 2016, SmartFunding is one of the fastest growing P2P lending institutions in Singapore. With returns ranging up to 24% a year, SmartFunding allows investors to invest from as low as S$100 while borrowers can receive up to S$200,000 worth of loans. On top of that, investors at SmartFunding can also stand to receive fixed monthly repayment with interest rates ranging from 8% to 15.1% per annum.

 

Why SmartFunding is better for non-accredited investors?

Since SmartFunding only requires investors to invest a minimum of S$100, non-accredited investors do not need to worry about having to put up a large amount of money into their investment. More importantly, SmartFunding is also user-friendly, especially for inexperienced investors who are new to P2P lending and simply want to support growing businesses in Singapore.

As individuals only need to be above the age of 21 to become an investor at SmartFunding, anyone who is interested to invest with P2P lending can always visit SmartFunding’s website (https://smartfunding.sg) to browse through the local SMEs to find a company that aligns with their interests and goals to invest in.

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