Small business loans from peer-to-peer platforms risk higher delinquency rates.
The article looks at loans given by Lending Club to small businesses. They found that small business loan applications were less likely to be funded than other types of loans, but when the quality of the application was considered, small business loans were actually more likely to be funded. Small business loans had higher interest rates compared to loans from traditional sources. These loans were also more likely to be delinquent or charged off.