The Courier & Advertiser (Fife Edition)
Peer-to-peer lending is paying dividends
LendingCrowd has completed more than 400 loans and is on track to lend about £40m this year
A Scottish company offering businesses keener loan rates and investors better returns is forecasting continued strong growth for the venture.
LendingCrowd was launched less than four years ago to provide an online peer-to-peer lending service.
Stuart Lunn, co-founder and chief executive of the Edinburghbased firm, said it has to date completed more than 400 loans with a total value exceeding £36 million.
Nearly 6,000 people have signed up with the LendingCrowd platform so far.
Mr Lunn said: “We lend to every type of small business across Britain, including sole traders, partnerships and limited companies.
“Almost a third of our lending is to businesses in Scotland.
“We have grown rapidly since we were founded in late 2014.
“We lent a total of £4.5m in 2016, and last year delivered loans totalling approximately £16m.”
The chief executive said being based in Scotland is definitely an advantage when it comes to starting and scaling a business.
“This is a very attractive place to live and work, and initiatives such as Fintech Scotland are playing an increasingly important role in raising the profile of our sector,” he said.
“We have had strong support from Scottish Enterprise and the Scottish Investment Bank (SIB) at various levels.
“In Edinburgh, we have access to a very strong pool of financial services and technology talent.”
Mr Lunn said the peer-to-peer lending market has only existed since 2005, but it expanded quickly and there are now dozens of platforms operating in the UK.
He added: “The platforms all tend to focus on one borrower product, for example SME loans or consumer loans.
“Much of the increase in platform numbers over the last two years has come in the property sector.
“We specialise in lending to small businesses and continue to expand our presence through being expert in that space.”
Mr Lunn said LendingCrowd works hard at making life easier for its borrowers and investors.
“In October 2016, we agreed an innovative funding partnership with SIB,” he continued.
“The initiative, the first of its kind in Scotland, saw SIB agree to provide up to £2.75m of funding to be invested through LendingCrowd in qualifying Scottish companies, alongside private investors.
“The agreement is expected to stimulate total lending of up to £35m in Scottish SMEs.”
Mr Lunn said LendingCrowd is on track to lend approximately £40m this year, adding: “We have a target to deliver £10m of loans to Scottish SMEs in 2018 – more than treble the previous year’s total.”
LendingCrowd began with a team of just two and the head count now stands at 18.
This figure is expected to reach around 25 by the year end.
The chief executive said the firm is looking to double lending each year.
Short-term targets are to reach a £100m loan book, with 1,000 borrowers and 10,000 lenders. There is currently a £26m live loan book, with 340 live loans and 2,500 active investors.