If you’re trying to start your own small business, you likely already know that it’s nearly impossible to be approved for a bank loan to secure the funds you need. With increased regulations and stricter lending standards placed on banks after the 2008 financial crisis, they simply aren’t handing out loans to aspiring small business owners like they once were. Thankfully, other avenues have opened up for determined entrepreneurs ready to fire their boss and secure their financial futures.

In fact, last month, Prosper and Lending Club, the two largest peer-to-peer lending sites, were responsible for more than $280 million in loan originations. The rise of peer-to-peer, or P2P, lending has been well-documented, and it’s estimated that the burgeoning industry has generated more than $3.4 billion in loans since being launched in 2006.

While the majority of the loans issued by these sites are used for debt consolidation, Lending Club, Prosper, and other peer-to-peer lending networks also provide credit for small businesses, offering them an additional borrowing option that didn’t exist a decade ago. By matching entrepreneurs and ordinary individuals with investors, peer-to-peer lending networks are able to take banks and middlemen out of the equation, providing low, fixed-rate loans to people to be used however they want.

Thus, if you’re seeking capital to start a small business, peer-to-peer lending has become a premier funding solution.

Who Qualifies for a Peer-to-Peer Loan?

The majority of peer-to-peer lending networks don’t provide business loans. However, if an entrepreneur or a potential start-up needs a loan to pursue a business idea, they can borrow as an individual. Instead of the loan being issued to a business entity, it is issued to an individual, and he or she can use the funds however they want. The loan will simply be categorized as personal debt.

While this is true for most peer-to-peer lenders, peer-to-peer lending networks specializing in funding small businesses in need of $35,000 or more now exist as well. Therefore, budding small business owners can turn to peer-to-peer lenders for any of their financial needs.

Understanding Peer-to-Peer Lending

Peer-to-peer lending is similar to eBay. You simply set up an account at one of the peer-to-peer lending networks, such as Lending Club, read the site’s borrowing guidelines, and review the types of loans they fund. Although Lending Club and Prosper don’t officially provide business loans, they do fund entrepreneurs looking to start a small business.

After registering an account, you simply enter in the loan amount you’re looking for and the maximum interest rate you are willing to pay. Once your listing is created, investors will begin sending you bids stating the amount they’re willing to lend you and the interest rate they would like to charge. As with any type of lending or financing, the higher your credit score, the better.

It’s also important to note that you need a credit score of 640 or above to receive funding from most peer-to-peer lenders. If you have a good credit score and history, you may receive a lower interest rate than you expect, because unlike traditional lenders, peer-to-peer lenders provide loans starting at only 6.78 percent.

Best of all, the monthly payments and interest rate are fixed, and the interest rate is amortized as well. There is also no prepayment charge, so you can pay off your unsecured small business loan as soon as you want without penalty.

As mentioned earlier, since you may need more than the $35,000 maximum loan amount offered by most peer-to-peer lending networks, some peer-to-peer lenders, such as Dealstruck, are now specializing in providing larger loans of $100,000 or more to the small business market. Typically, sites like these offer two to five-year loan terms with low interest rates starting at only five percent.

The Cost to Peer-to-Peer Borrowers

Businesses often find that borrowing from a peer-to-peer lender is much cheaper than borrowing from a bank, because there is no middleman involved. In addition to having more overhead, banks are still struggling to recover the money they lost during the financial crisis.

This added financial stress trickles down to borrowers in the form of higher interest rates, if they are able to get a loan at all. Since peer-to-peer lenders compete with one another to provide you with the loan you need to start your business, you’re able to benefit from the lowest interest rate possible.

From Dream to Reality: Rob’s Story

Two short years ago, Rob Strong dreamed of opening his own landscaping business. Although he pinched pennies and saved for years, he still found himself in need of additional funding to purchase the equipment necessary to finally launch his dream of being his own boss.

Sick and tired of fattening someone else’s pocket each day, one day Rob decided enough was enough. Unfortunately, he still needed $10,000 to buy all of the necessary equipment, so he went to his bank with the business plan; he spent hours upon hours completing in order to get a small business loan for the money he needed. Despite banking there for years, the banker denied his application because his credit score was only five points below the threshold.

“What am I going to do now?” he asked himself. Luckily for Rob, he was browsing online two days later and ran across a major peer-to-lender. “It’s worth a shot,” he thought. After spending five minutes filling out the application and setting up his profile, he turned his computer off and waited. Two days later, Rob signed in and was shocked to see that 50 investors had provided him with bids. The next day, he received the full amount he needed.

Two years later, Rob’s landscaping business is in full swing. He now has 20 employees and earns six figures a year while “working” 20 hours a week.

There are thousands of people who share Rob’s story. Thanks to peer-to-peer lending, people across the country have been able to achieve their dreams of becoming small business owners. With the peer-to-peer lending industry growing each day, thousands more are sure to become small business success stories as well.

You have entrepreneurial spirit, you’ve researched all of the work at home business options available, and you’ve armed yourself with the basic knowledge necessary to launch your new home based business. But, have you considered one of the most critical components related to the success of your business…whether your product niche or business category is in demand right now?Clearly, the most successful home based businesses are those offering products that are in hot demand. The key, of course, is determining which products are best sellers that will provide the most profit potential for you. When evaluating business ideas and market demand, start by identifying topics that are popular with the general public, then narrow your research by looking a specific segments of the population.For example, today internet marketing and social media are extremely popular topics. With this basic knowledge, an on-line business owner could offer “How To” e-Books, white papers or articles on sales prospecting using internet and social media marketing tools. These content-based products could be written by the owner themselves (you) or offered through affiliate marketing – thereby matching demand for content with targeted products, resulting in significant profits with minimal effort.Determining whether there is sufficient demand for your product is critical to ensuring that your home based business will be a success. Demand for a topic or product will drive prospective buyers to your website, as a result of internet search requests by those seeking information about a particular subject or offering. Simply having a website will not generate leads or ensure that potential buyers are visiting your site; you must drive prospects to your website through marketing activities designed to create visibility for your site.An effective way to evaluate demand for a topic or product is to conduct a keyword search through Google’s keyword tool. Google’s keyword search tool allows you to determine the level of interest for a specific subject, by showing you the number of times that topic or product has been searched during a certain period of time. Clearly, the more often a topic or product is searched, the greater likelihood that product will be a best seller for the home based business owner.Once you identify a related search engine keyword, note its average daily volume, then research even further. For example, if you discover a good volume keyword phrase related to home based businesses, such as “top ten home based businesses” don’t stop there – continue further and use the tool to find keywords related to that phrase that you may not otherwise have considered.After you have compiled a list of prospective keywords, use the Google keyword tool to search for those specific words or phrases in order to identify the number of results being returned. The most optimal search words/phrases are those that combine the highest volume (popularity) with the fewest results in a search (competitiveness).The bottom line here is simple; those words or phrases that have the highest volume of searches (people looking for that subject or product) with the fewest results (meaning only a limited number of sites offer information about that subject or product) will produce the best results for your business, if you tie those words or phrases to your website. The fewer sites offering information about that topic, the less competition for your business.Keyword search tools are an effective way to ensure that your business is offering products or services that are in demand and popular among the general public. For more information about home based businesses visit http://www.thehomebasedbusinessreview.com

Product creation could be a frightening subject for a lot of Internet marketers to face. Some folks who get in the game with the intention of making a full time income are completely ignorant as to how an online business operates. One of the most profitable ways to create online cash is by creating a product that others are happy to pay for.

Product creation is legitimate method of generating money through internet marketing but many entrepreneurs get it wrong. They start by imitating their Internet marketing gurus by creating information products on Internet marketing in hopes of getting rich the way their heroes did. The problem is that they usually don’t know what they are doing and enter a highly competitive niche with very little marketing experience or connections.

Here are a few tips for effective product creation that may help you get on the right track:
Start by finding a profitable niche with low to moderate competition. If you conduct some rudimentary market research and keyword research, you’ll find many opportunities in areas that will surprise you. Amazon and eBay are two great places to brainstorm for product ideas.

Developing Your Product does not have to be a difficult project. You can find experts in the right field for your niche and pay them to write the material while an artist designs the packaging and website or blog. You can outsource the entire product creation part of the project after you conduct the research and testing to ensure profitability.

Sales and marketing strategies should be created while developing the product and learning about the market. Some experienced marketers use pay per click to drive traffic to their offer page; some folks outsource the entire marketing campaign to affiliates through ClickBank or other affiliate programs.

Product creation does not need to be hard, particularly when the merchandise is electronic. E-books, videos, audio and multi-media products sell very well. They are distributed immediately to customers electronically. Once you have a good feel for a niche market, try to service your customers with associated products and upgrades. If you want to earn money online through product creation, you must understand supply and demand. The majority of new online marketers fail miserably because they go after highly competitive markets or forget to research their chosen niche properly. You have to create your products according to the needs, wants and desires of the prospective customers.