Promissory Note

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Promissory Notes Platforms

Examples of online platforms and market places that offer business-based promissory notes are P2P lending platforms such as The Lending Club, Upstart, Funding Circle, Prosper, CircleBack, and Mintos. A deep dive of these findings has been provided below.

Online Platforms and Market Places that Offer Business-Based Promissory Notes

  • Online platforms or marketplaces that distribute or offer business-based promissory notes do exist. P2P lending platforms are one example of this type of marketplace.
  • According to the Federal Reserve Bank of Dallas, P2P (peer-to-peer) lending is an "online market that matches potential lenders with borrowers who need access to capital."
  • These platforms typically work by completing loans via a funding bank. Once a requested loan has enough investor backing, the loan funds will be sent to a third-party bank. The third-party bank then provides the loan to the borrower in exchange for a promissory note.
  • The promissory note is "assigned to the P2P platform" and serves as a "promise to pay agreement between the P2P platform and the original borrower."

Examples of P2P Lending Platforms

The platforms below are P2P lending platforms that utilize business-based promissory notes:
  • The Lending Club Corporation is a key player in the P2P lending space. The investors on this platform are composed of individual investors, banks, finance companies, and institutional investors. The borrowers on this platform are primarily consumers who want to pay off their credit cards or consolidate debt.
  • Upstart is a key player in the P2P lending space. Upstart investors are banks and credit unions and the borrowers are consumers looking for personal loans.
  • Funding Circle is a key player in the P2P lending space. Funding circle investors are business investors and the borrowers are businesses in need of funding to spur growth.
  • Prosper is a key player in the P2P lending space. Prosper investors are institutions and individuals and the borrowers are consumers in need of personal loans.
  • CircleBack Lending is a key player in the P2P lending space. CircleBack investors are individuals and institutions, while the borrowers are consumers in the prime and super-prime arenas.
  • Mintos is a key player in the P2P lending space. This platform is designed to facilitate retail loans between institutions and consumers.