Peer-to-peer (P2P) lending lets individuals fund business loans directly through a platform such as Maclear, earning interest as borrowers repay. Getting started means registering and verifying your identity, funding your account, then selecting loans manually or through AutoInvest, and diversifying across multiple loans from day one. Capital is at risk and returns are not guaranteed.
How to Start Investing in P2P Lending: A Beginner’s Guide
What Is P2P Lending? A 30-Second Primer
P2P lending is the type of investment that involves private loans from the investors who lend to businesses that need finance. An investor may purchase a claim for the part of the loan rather than purchasing shares in the company. The borrower, in turn, agrees to pay fixed interest to the investor and repay the principal when the claim reaches maturity. A P2P investor does not buy ownership in a business, unlike with stocks and savings accounts. Instead, the success of the investment project depends on the borrower’s financial situation.
Maclear offers the investment projects that are funded by business loans divided into small claims for the investor. In order to start investing, it is necessary to buy a claim of at least €50. The interest is paid monthly, and the principal is paid upon the claim’s maturity.
What to Check Before You Invest on Any P2P Platform
The table below presents the necessary basics that the investor needs to know before making an investment, either manually or through tools like AutoInvest.
| Dimension | Manual Selection | AutoInvest |
|---|---|---|
| Access requirements | Available after registration and initial verification | Requires completed Proof of Address (PoA) and signed form A |
| Project scope | All available projects | Native projects only (ACL projects excluded) |
| Control over each deal | The investor manually selects every investment | Investment following the predefined filters like the term of the loan, loan amount, interest rate, etc. |
| Time required | Every project is under individual review, requiring longer to assess | Faster assessment through automatic allocation of the funds according to the selected strategy |
| Diversification speed | Slower and depends on manual investment decisions | Faster as funds are allocated across matching projects automatically |
| Limits | No limits on AutoInvest strategy | Up to 10 AutoInvest strategies, minimum of €50 for an investment, one investment per project |
| Suitable for | Investors who want to assess each project individually and learn the fundamentals of P2P lending | Investors who prefer automated portfolios are trying to continuously diversify with minimal manual involvement |
Maclear AG is a company that is a member of PolyReg SRO and functions under Swiss financial regulations. Maclear does not withhold taxes and does not provide a guarantee of risk-free investment since P2P investment always carries a certain degree of risk. However, Maclear utilizes the tools to assess the borrower’s credibility before listing the project.
The first tool is credit risk assessment, ranging from AAA (the highest) to D (the lowest). Before the project is listed on Maclear, the platform assesses the financial statements, the managerial structure, operations of the company, and other factors that affect the borrower's credibility.
Furthermore, investors’ funds are protected by the collateral, the asset with a certain market price that is pledged against the loan. The Loan-To-Value (LTV) ratio is the borrower's indicator used to assess the value of the collateral. LTV is calculated using the following formula:
LTV = Loan amount / Collateral value
A conservative (lower LTV) value below 100% usually means that the collateral’s price fully covers the loan. Conversely, if the value is higher, it means that some parts of the loan remain unsecured, leaving the investor with a lesser buffer.
Maclear also has a mechanism to protect the investor against temporary interest payment disruption. A Provision Fund is a reserve of funds formed from the commissions for the platform’s service that can continue interest payments in case the borrower temporarily stops the process. However, a Provision Fund does not guarantee returns of the principal and does not function like a buyback guarantee.
Is P2P Lending Safe for Beginners?
P2P lending is not completely safe for beginners. P2P naturally carries risk, including overconcentration, borrower default, liquidity risk, and some other risks. However, the mechanism, like the collateral with a conservative LTV, Provision Fund, and the credit risk scoring of the project, may mitigate the risks.
What Happens if a Borrower Defaults?
If the borrower defaults, Maclear can start the enforcement of the collateral after 60 days of non-payment. Before that, the Provision Fund continues the interest payments to the investor. On day 30, soft debt collection begins. If it is unsuccessful, then, after day 60, legal proceedings about the collateral begin.
How to Start Investing in P2P Lending: Step by Step
P2P investing can be divided into 4 steps. These steps are discussed in more detail in the section below.
Step 1: Register and Verify
The user needs to create an account, verify the email address, and undergo the identity verification procedure according to the KYC policy. Maclear also requires a Proof of Address check to assess the user’s current residential status. Before the Proof of Address, the access to the account is restricted. Once the Proof of Address is done, the investor can choose a project and make the first investment. After that investment, Maclear would provide Form A, a document that, once signed, confirms the ownership of the invested funds and gives access to tools like AutoInvest and further functionality of the platform.
Step 2: Fund Your Account
After the account’s verification and the client’s verification are complete, the investor may send the money to the account by using the supported tool. It is important to note that the investor needs to put the correct payment reference to avoid potential delays in the attribution of funds. Maclear allows the investor to deposit any amount, starting from the minimum of €50 for a SEPA deposit. If the investor does not deliberately use AutoInvest, the funds are not invested in a project automatically and remain available on the account.
Step 3: Choose Manual Selection or AutoInvest
Selecting either mode will change the nature of investment in terms of how the investment is attributed to the project. Manual selection requires the investor to review and choose each loan by themselves. AutoInvest, on the other hand, provides filters that allow you to set the desirable LTV, interest rate on the loan, borrower’s credit risk score, and term of the loan. When the investor uses AutoInvest, there is a maximum of 10 simultaneous strategies available. ACL projects are excluded from AutoInvest filters.
Step 4: Diversify From Day One
Diversification is a strategy that allows one to mitigate the risks related to the investment. If the investor then proceeds to choose more projects in various industries and with different terms, interest rates, and credit risk scores, they can effectively reduce the effect of one borrower’s default by spreading the capital. That is why diversification can be such an important next step.
How Much Money Do I Need to Start P2P Lending?
The minimum for a P2P investment on Maclear is €50 for a claim. This sum is the basic minimum for one investment claim, not for portfolio diversification. The investor then should assess how much money they want to attribute to their P2P portfolio themselves.
Common First-Time Mistakes to Avoid
P2P lending is an investment, not a savings product: there is no deposit insurance, returns are not guaranteed, and invested capital may be partially or fully lost.
Some mistakes the beginner investors may make can put the portfolio at risk. The first mistake is concentration. This means that the investor puts a large percentage of capital in a few companies (like 1 or 2), following the logic of a higher interest rate and a high credit risk score. However, in case of default, the investor can lose more money since a larger sum is put into one project.
A higher interest rate viewed in isolation is another mistake. Before the investment is made, it is also necessary to see the LTV ratio, collateral and loan terms, and the project’s internal credit risk score. A higher interest rate usually compensates for uncertainty in the other terms of the loan; that is why careful assessment of other factors is an advisable step.
Limited liquidity of a P2P claim is another issue because, typically, a P2P claim should be held until maturity. The investor may only sell the claim earlier on the Secondary Market, however, the selling depends entirely on the demand from the other investors.
Can I Withdraw My Money at Any Time?
If the investor has already attributed funds to the loan, it is impossible to withdraw them until maturity and repayment unless the investor sells the claim on the Secondary Market. However, the sale is not guaranteed, and it is safer to assume that the funds committed to the loan should be held until the claim’s maturity.
What Returns Should Beginners Realistically Expect?
P2P interest should be evaluated based on the contractual interest rate and the metric of Annualized Return on Investment, or AROI. This metric shows an expected value of the earnings for the period until the claim reaches maturity. It is important to understand that AROI is an expected metric and is not equal to a guarantee of returns. P2P investment carries certain risk, and this risk cannot be completely eliminated.
Projects listed on Maclear feature monthly interest payments as well as, typically, a short-to-medium maturity term. The risks related to the borrower’s default and liquidity remain for each of the projects.
FAQ
Is P2P lending safe for beginners?
P2P lending risks are not risk-free. Mechanisms like the Provision Fund, the collateral, and the Secondary Market for liquidity may mitigate, but not eliminate, the risks related to P2P investment. Capital always remains at risk.
How much do I need to start?
There is no universal minimum for every platform. Maclear’s AutoInvest sets a minimum of €50. That is enough for the purchase of one claim. However, platforms differ in terms of their minimums.
What happens if a borrower defaults?
If the borrower defaults, the investor continues to receive interest through the Provision Fund. After day 30, soft debt collection starts. If the borrower fails to meet repayment obligations after day 60, the collateral enforcement procedure may start.
Can I withdraw anytime?
No, when the investor has already committed the funds to the loan, it is not possible to withdraw the money earlier. One option is to sell the claim on the Secondary Market provided there would be interest from other investors. However, the sale is not guaranteed.
Do I need to pay tax on P2P returns?
Yes, many jurisdictions treat P2P investment income as interest income. Maclear does not withhold taxes automatically. It remains the responsibility of the investor to declare the returns and file the annual declarations. In case of doubt, it is advisable to consult the local tax advisor.
About Maclear
Maclear AG is a Swiss-based P2P lending and crowdlending platform headquartered in Switzerland. The company operates as a financial intermediary in the non-banking sector and is a member of PolyReg SRO, in compliance with Swiss financial regulations including AML, KYC, and GDPR. Maclear offers retail and qualified investors access to vetted business loan opportunities, with built-in risk assessment, a Provision Fund, and a Secondary Market for liquidity.
The content of this article is provided for informational and educational purposes only. It does not constitute investment, financial, tax, or legal advice. P2P lending and crowdlending investments carry a risk of partial or total capital loss. Past performance is not indicative of future results. Liquidity on a secondary market is not guaranteed. Readers should conduct independent research and consult qualified advisors before making any financial decisions. Availability of products and services may be restricted in certain jurisdictions.