Your capital is at risk and investments are not covered by the Financial Services Compensation Scheme (FSCS).

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Your capital is at risk and investments are not covered by the Financial Services Compensation Scheme (FSCS).

Understanding the difference - Crowdfunding & Peer-to-Peer (P2P)

Crowdfunding and Peer-to-Peer lending have become the new buzz words of alternative financial solutions. Since their emergence in the 2000’s they have become increasingly well-known terms, but the differences between the two aren’t always as plainly understood.

Here is our quick guide to the key differences between Crowdfunding and Peer-to-Peer lending.


Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money with the opportunity to earn a return on their capital investment. In the case of a crowdfunding opportunity, it is for the investor to determine if the opportunity presented is in line with their appetite for risk. It is also the crowdfunding issuer's responsibility to ensure payments due to investors are completed on time.

Brands that have benefited from crowdfunding include Oculus (later acquired by Facebook), Skybell and Brewdog.

Crowdfunding attracts a wide and diverse portfolio of brands and opportunities. Here at Co-Lend, the Property Crowdfunding Platform, we specialise in connecting investors with professional landlords who have asset back investment opportunities.

You can find out more about Crowdfunding at the UK Crowdfunding Association’s website:

Peer-to-Peer Lending:

Peer-to-Peer (P2P) Lending are platforms where they accept deposits from many lenders and diversify those funds across many borrowers. The platform operator is matches lenders and borrowers according to an indicated risk tolerance. The operator then acts on behalf of the lenders by collecting repayments from borrowers, pursuing loans in default etc.

Peer-to-Peer lending firms include Ratesetter, Zopa and Funding Circle.

One of the key differences therefore is diversification of risk where with Crowdfunding it is for the investor to decide whether the opportunity matches their risk profile, whereas with Peer-to-Peer (P2P) Lending, the platform operator is matching the lenders and borrowers according to their confirmed in advance risk tolerance.

You can find out more at:

Risk Statement:

Co-Lend Limited (firm reference number 838588) is an Appointed Representative of Share In Ltd (firm reference number 603332), which is authorised and regulated by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request. Co-Lend Limited does not give advice or make personal recommendations. All investment products carry risks. Past performance is not a reliable indicator of future performance. Please note that capital is at risk and returns are not guaranteed.

The information in this article is considered correct as of 13/09/2019.