Bitbond review peer-to-business lending
This Bitbond review explains what services the bitcoin lending platform, Bitbond, offers, what peer-to-business loans are, what return you can expect by lending on Bitbond, and what risks are associated with using the site.
What is Bitbond and what services do they offer?
Bitbond is a peer-to-business lending platform that allows people to either lend or borrow money in the form of bitcoin. The Bitbond site is run by a company called Bitbond GmbH. This company operates out of Germany. However, borrowers and lenders from all across the world can create accounts on the Bitbond site and borrow or lend bitcoin.
Bitbond has been growing steadily in size and now has over 100,000 borrowers and lenders on the site. Many of the borrowers are eBay sellers or small business owners who need to purchase inventory for their businesses. The maximum amount that a borrower can borrow on the site is $25,000. The terms of the loan repayment vary from six weeks to three years.
Bitbond is very attractive to many borrowers because it eliminates the need to go through a bank or another traditional financial institution in order to obtain capital. Bitbond also has a clean interface which is very easy to use. Further, bitcoin is very easy to exchange for local currencies. So, it can be preferable for small business owners to obtain a loan in bitcoin, versus one in a foreign fiat currency, which might not be as liquid or as easy to exchange.
What are peer-to-business loans?
Peer-to-business loans are loans that are given by individuals to businesses. These types of loans are extremely common on Bitbond. Peer-to-business loans are an alternative to peer-to-peer loans and business-to-business loans. Peer-to-peer loans are loans that are made from individuals to other individuals. Business-to-business loans are loans that are offered from businesses to other businesses.
Any of these loans can be used to generate capital. They all function in a similar manner that involves a lender giving money to a borrower which must be repaid by a certain date plus interest.
The Bitbond website is designed for peer-to-business loans. It is heavily used by small businesses who do not want to go through the tedious process of obtaining a loan from a traditional lender such as a bank. Obtaining a bitcoin loan on Bitbond can be significantly easier and faster than using traditional lending options. Many small business owners need access to capital very quickly, and Bitbond allows them to get this capital in a very small amount of time.
What return can I expect
The interest rates on bitcoin loans on Bitbond can vary depending on a number of factors. For example, the creditworthiness of the lender, the amount of the loan, the length of the repayment period, and several other things can all affect interest rates. However, Bitbond advertises on its homepage that lenders can earn 13 percent interest on their bitcoin loans.
So, you can use the 13 percent figure as a guideline. 13 percent interest is considerably higher than the projected returns many other types of investments and loans. For this reason, bitcoin loans on Bitbond are attractive to many different lenders.
Borrowers on Bitbond also have to pay a loan origination fee. This fee is typically 1-3 percent. For shorter-term loans, it is usually 1 percent and for longer-term loans, it is usually 3 percent. Only the borrower has to pay the origination fee. The seller does not have to pay any fees for origination.
The loans are given in actual bitcoins. So, if you would like to make a loan, you and the borrower agree to a certain amount of bitcoin to loan. Then, the borrower must repay this amount of bitcoin plus interest within a certain amount of time.
What are the risks associated with Bitbond?
There are a number of risks associated with Bitbond. The first is the risk of default by the borrowers. However, to mitigate this risk, Bitbond, reviews the credit scores of every single borrower on its platform. It also provides borrowers with a risk score of A-F. A is the best and F is the worst.
So, having the creditworthiness of the borrowers assessed for you in advance can help to reduce the risk. If you want to lend to a riskier borrower, then interested rates will tend to be higher to compensate for the higher risk.
A second risk associated with Bitbond is the volatility of bitcoin itself. The price of bitcoin is so volatile that it is possible for lenders on the Bitbond platform to offer a bitcoin loan, and to lose money on this loan simply because the price of bitcoin dropped during the loan repayment period. However, the opposite is also true, and the price of bitcoin could rise during the loan repayment period. So the volatility of bitcoin can either hurt or help lenders on the platform.
Bitbond appears to be a fairly solid bitcoin landing platform for the time being. This platform could be ideal for investors who are looking to generate returns on bitcoin in ways that are a relatively low risk. Of course, there are higher risk borrowers on Bitbond in addition to lower risk ones. However, for those who are willing to offer loans to higher risk borrowers, the interest rates can be higher and therefore so can the returns. So, it is up to the individual lender to decide how much risk he or she is willing to deal with in order to obtain a certain amount of reward.
Many people argue that the best way to make money with bitcoin is simply to buy it and hold it. However, that strategy is much too passive for some people. Bitbond offers a more active alternative to buying and holding for people who want to make money with bitcoin. Although there are some underlying risks with this platform, thus far, it has proven itself to be reliable. The credit rating system for borrowers helps to make it easier for lenders to find ideal borrowers. This is one of the top strengths of the platform. If you’re looking to become a bitcoin lender, then Bitbond is an excellent option for you.