Investments such as these should be considered niche and are rarely suitable for the novice investor. They have become increasingly popular largely due to the record low level of interest rates and the restrictive lending criteria adopted by many banks.
Some of the risks are that assessing a company’s potential, its past performance and anticipated returns is difficult. Also, you would not receive protection from the Financial Services Compensation Scheme if anything were to go wrong.
I would not dissuade everyone from investing this way but, as a general rule, annual ISA allowances should be utilised first. If you are going to invest, do so initially with only a small sum that you are not reliant upon.