Retail investors will be able to fund business loans for the first time in Australia after the corporate regulator granted a new licence to the peer-to-peer lending platform RateSetter.

RateSetter joins a group of fintechs now offering business financing, including local players Prospa and Moula, and international companies OnDeck, Spotcap and ThinCats.

There are several models emerging in this space. Prospa, Moula, OnDeck and Spotcap are funded by institutional investors and lend off their own balance sheets rather than operating a marketplace for loans. Rival ThinCats is a marketplace for business loans but only sophisticated investors can participate.

RateSetter's model is different because it is a marketplace lender open to retail investors.

Most of the online business lenders to have emerged in recent years provide unsecured loans to business for short durations at relatively high interest rates. RateSetter will provide some unsecured lending but will focus on secured loans.