KEEP YOUR MONEY SAFE WITH OUR

DUE DILIGENCE
CHECKLIST
Keep your money safe and invest on P2P lending platforms.

This checklist will help you protect your investments

and avoid fraudulent P2P lending platforms.

BO
R
TO ED NU
LO FLA S:
O G
FO K O S
R UT
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 2

KEEP YOUR MONEY SAFE WITH

OUR DUE DILIGENCE CHECKLIST

The best way to become a successful P2P investor

is by becoming educated in the workings of any
platform you wish to invest in. Some companies are
more forthcoming with the information you can find
out about them, and for others, you’ll have to do a
little more digging.

Transparency of a platform is crucial, and often a

good sign to potential investors of its legitimacy.

Throughout this guide, you’ll become a more

knowledgeable p2p investor. You’ll learn how
to improve the safety of your p2p investments,
avoid investing in scams, and overall gain a better
understanding of the platform you wish to invest in.

Our guide is detailed and each step is clearly

explained so if you’re a beginner investor, you’ll have
no problems conducting your own due diligence on
platforms straight away.

BONUS: WE’LL EVEN SHOW YOU HOW TO SPOT

EARLY RED FLAGS AND SAVE YOUR MONEY!
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 3

CHECKLIST TO SELF-ASSESS
A P2P LENDING PLATFORM

This list is going to increase your chances of investing on a legitimate P2P lending
platform, a marketplace, or a crowdfunding platform. This framework is suitable for
you if your goal is to invest on a P2P lending platform but you aren’t so sure about
the legitimacy of the company.

How to use this document?

Open up this file or print it so you can use it as you

conduct your dilligence about a P2P lending platform.

Tick the checkbox if your research is conclusive.

As you work down the file, write down notes which you
can then use to reach out to the platform and verify
certain information.

NOTES

About us page is available

The about page gives you a glimpse of the
company’s track record and the platform’s
purpose

The CEO, the founder, and the team

behind the platform are listed on
the website
Even P2P lending platforms with small
teams should publish information about
their team to the public.
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 4

NOTES

The CEO has a public LinkedIn profile

Research the CEO on LinkedIn and check
whether they are connected to other
relevant people from the industry. Most
CEOs have a network of at least a couple of
hundred connections

The CEO has previous experience

in the finance industry
Look up the LinkedIn profile and the history
of the CEO in business registries. Look out
for experience in lending, in real estate, or in
the banking sector.

The CEO or the founder is not

connected to scams or frauds
Simply google the name of the CEO and
look up news articles from local news
outlets to see whether you can spot
connections to criminal activities.

The CEO is visible in the media

You are able to find video interviews
with the CEO of the platform. Look out for
interviews that provide some additional
value that you won’t find elsewhere. Don’t
get influenced by paid collaborations.

A risk disclaimer is available

A risk disclaimer includes information about
the risk of P2P lending. Every solid platform
informs the user that they may lose their
investment as P2P lending is a risky asset
class.

A Contact page is available

The platform has a dedicated contact page
with an address and the legal name of the
company.
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 5

NOTES

Verify the legal name and address

The legal name and address on the website
matches the address in the local business
directories.

A statistics page is available

Look out for information about the total
funding volume, investors’ earnings,
platform’s track record, number of investors,
defaulted loans, and average loan portfolio.

Terms and Conditions are

available before registering
The T&Cs are clear and comprehensive.
They inform you about your rights that arise
from investing in a dedicated P2P lending
platform.

A generic template of the loan

and assignment agreement is
available
When investing in P2P loans, you are
entering into a loan agreement with the
borrower or into an assignment agreement
with the lending company. Check whether
a template of those documents is available
prior to investment.

The platform explains how the

funds of the investors are stored
Make sure to understand how your funds
are stored. Some platforms store investor’s
capital on separated business accounts,
while others don’t store the funds but your
investment goes directly to the account of
the borrower.

The financial report of the platform

is available
You are able to find the financial reports of
the platform online in English.
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 6

NOTES

The financial report is audited

The audit of a financial report increases
the credibility of the data presented in the
financial statements.

Information about the loan

originators is publicly available
P2P marketplaces provide additional
information about the lending companies.
Look for information about the loan types,
protection schemes, skin in the game ratios,
total funding volume, outstanding portfolio
on the platform, and average interest.

The platform provides financial

reports for their lending companies
Established lending companies are able
to provide financial reports. Note, that
the financial reports for the last year are
typically released within the first seven
months of the next period. Example: An
audited financial report for 2020 will be
published in mid-2021.

The lending company provides a

quarterly performance overview
More established finance groups or
bigger lending companies provide
quarterly reports to showcase the current
performance of their loan portfolio.

The financial reports of the lending

companies are audited
Most jurisdictions require lending
companies to provide audited financial
reports.
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 7

NOTES

The platform provides news

updates and relevant educational
content on their blog
Every legitimate P2P lending platform
releases news and educational content
on its blog to increase transparency
and inform investors about current
developments.

A FAQ section is available

The FAQ section helps you to answer
the most relevant and frequently asked
questions about the platform’s services.

The protection of your

investments is comprehensive
and transparent
P2P lending platforms offer various
protection schemes to decrease the risk
of default. Make sure that the protection
scheme of a dedicated platform is clear
and comprehensive.

The platform is able to address

your questions in a timely matter
Before you start investing, make sure to
reach out to the platform with a set of
questions. This gives you an idea about the
responsiveness as well as the support of the
platform.

The platform is regulated

Research whether the platform has a
dedicated crowdfunding license or whether
the P2P lending site is in the process of
becoming a licensed P2P lending operator.
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 8

RED FLAGS
TO LOOK OUT FOR

Here is a list of scenarios that may drastically increase your chances of losing
money on a dedicated crowdfunding platform. The more red flags you notice, the
higher the risk is of losing all of your money. This list will help you to spot early signs
of fraudulent activity so you can liquidate your portfolio.

The platform isn’t able to address specific and relevant questions

about your investments
Yes No Platforms with problematic lenders often provide excuses and avoid direct
answers to your questions.

More than 50% of your portfolio is constantly delayed

Portfolios with a huge amount of delayed loans increase the chances that the
Yes No lending company won’t be able to fulfill its obligation to recover the debt.

You are not able to withdraw your money

Platforms that run a ponzi scheme won’t let you withdraw your money. The
Yes No chances of recovering your money are low. Request regular withdrawals before
investing even more funds.

The platform is promising risk-free investments with high returns

P2P lending is not risk-free and you should not expect higher yields than 12% on a
Yes No long-term basis.

The platform is listing fake projects

Several platforms that offered investments in business loans have previously listed
Yes No fake projects.
P2P LENDING PLATFORM DUE DILIGENCE CHECKLIST 9

Frequent changes in the management

Changes in the management might have a negative impact on your performance
Yes No as the reasons for the changes are often unclear.

Frequent changes of bank accounts

Pay attention to the bank account that the platform is using. The bank account
Yes No should typically be in the same country as the legal address of the company.

Suspicious changes of the terms and conditions

Changes in terms and conditions that release the platform from any responsibility
Yes No towards its investors are increasing your risk on a dedicated platform.

You have received a time-buying letter

Fraudulent platforms often release a time-buying letter that should reassure the
Yes No investors that the platform is working towards resolving any issues. The goal of this
letter is just to buy more time for the people behind the platform.

The platform removed protection schemes

Removing an earlier promoted protection scheme is a sign that the platform isn’t
Yes No able to deliver on its obligations to the investors.

No template of loan and assignment agreements

If the platform isn’t able to inform you about your rights that arise from purchasing
Yes No claims against borrowers, you shouldn’t bother investing.

Disclaimer

Please note that P2P lending is a high-risk investment and

you should always conduct your own research as well
as monitor your P2P lending portfolio on a regular basis.
There are no guarantees of any specific returns and there
is always the chance that you might lose your money. You
alone are responsible for the risk that you are taking by
investing in P2P loans.
BECOME A MORE EDUCATED
P2P INVESTOR

https://p2pempire.com/en

© 2021 P2P Empire - All Rights Reserved