Scotland?s first dedicated peer-to-business (P2B) crowdfunding platform, LendingCrowd, has got off to an encouraging start by funding a range of SMES across the country and the wider UK. LendingCrowd?was set up by entrepreneur Bill Dobbie and co-founder & WeDO member?Stuart Lunn, who launched the platform at the end of last year, it has already attracted numerous investors to the site ? and has ambitious plans for 2015.
So what is crowdfunding or crowdlending? In LendingCrowd?s case, the process enables businesses to access finance easily and quickly, whilst investors have the potential to earn attractive returns – from 5.95% to *12.25% – by lending to them – crowdfunding in Scotland offers investors great potential to grow their money.??By directly connecting people who want to lend to businesses, the crowdfunder eliminates the costs and complexity of the banking world.
The business employs a credit team with a combined 100 years of experience who look after both borrowers and investors ? the latter are attracted to Scotland?s buoyant SEO sector ? with the lure of returns, in some cases, up to *12.25%.
Bill Dobbie says:
?Our vision for LendingCrowd is simple. We want to become a leading P2B crowdfunding business in the UK by offering businesses the opportunity to grow and for investors to make attractive returns. My involvement in start-ups and SMEs made me realise the difficulties for small businesses to secure loans. Traditional lending models don?t work for all businesses all of the time. We’ve developed a credible alternative for SMEs looking to build their businesses. What better way to do that than to allow real people to invest in local companies through an online platform.?
LendingCrowd?s model operates via an order-driven exchange, attracting the most competitive bids to fund the loan application -?providing the borrower with the lowest interest rate on their loan. Investors have a choice of risk categories, with corresponding returns, and a minimum investment of ?20.
Stuart Lunn said the venture had built-in expert credit risk assessment and, unlike banks and other platforms, LendingCrowd enables companies to “speak to the decision-makers” directly about their loans. He explains:
?Our aim is to challenge the status quo and open up new channels through which local SMEs can secure credit and grow their business. The days of solely relying on traditional banks are over. Business lending is changing for the better for the 4.9 million SME?s in the UK.?
Watch LendingCrowd?s short video of how it has helped an innovative events company secure essential funds.
Some 7000 SMEs have used crowdlending platforms to access loan finance in the UK, which exceeded ?1bn 2014; this year is expected to grow even more.
Click HERE to see an infograph of how crowdlending works.
*If you invest through LendingCrowd you should understand that as a lender, your capital may be at risk. LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (IPRN 664753). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme. ?LendingCrowd is a credit broker and not a lender.?
Stuart Lunn will be speaking at our Breakfast Forum in June, details will be available to members soon.