Cheers all round for peer-to-peer funding revolution. February industry news
Following the ‘democratising finance’ series from last month, the Financial Times takes a deeper look into how technology is impacting the way we finance small businesses. This piece touches on our partnership with Santander, and how technology companies are working alongside banks to help them contribute to the growth of small companies. Another disruptive and exciting step towards helping more small businesses access finance.
Hargreaves Lansdown, the UK’s leading fund supermarket, announced that it is to set up its own peer-to-peer lending platform. They will be looking to compete with the UK’s largest operators and get a taste for the rapid growth in the industry. Peer-to-peer lending is expected to grow even more once it becomes included within ISAs.The Peer-to-Peer Finance Association is currently recommending that the government introduce a third Lending ISA. James Meekings, co-founder, was quoted in the Financial Times following last week’s Alt Fi conference: “The Isa is going to change the industry.”
Julia Rampen gives some great tips on how to make the most of our savings, with a round up of ISAs and peer-to-peer lending investments. As already mentioned, lending through Funding Circle will become included within the tax-efficient ISA. Exact timings are yet to be confirmed but we expect the government to respond to the consultation within the next month. It’s a big step forward for the industry and a great way for you to feel better about lending! Check out a few more tips about how to how to profit from peer-to-peer lending in this article in DepositAccounts. If you have any questions or would like to start a conversation, please check out our forum here.
The wisdom of the crowd or herd mentality? Crowdfunding looks tempting but it pays to tread carefully
As the alternative finance industry grows and many different companies and models are springing up, the Daily Mail took a look at the options available to investors. This article encourages first timers to try members of the Peer-to-Peer Finance Association, who have a demonstrable track record and have worked hard to build trust amongst consumers. Although peer-to-peer lending lies at the safer end of the spectrum and is regulated by the FCA, investors must remember that returns can go down as well as up, because your capital is at risk. At Funding Circle we believe that full transparency builds trust, and as a registered investor you can download our entire loanbook here.
Following our recent announcement that RBS will now refer small business customers they are not able to help to Funding Circle, Anthony Hilton discusses how the industry is growing and working with the wider financial ecosystem. He calls peer-to-peer lending and crowdfunding ‘the phenomenon of our time’ and ‘a revolution indeed’ as the industry continues to boom. Nesta quotes that funds raised via these lending platforms have risen from £267 million in 2012 to an astounding £1.42 billion last year.
This month we are pleased to announce that we have partnered with Victory Park Capital who will lend $420 million to both US and UK small companies over the next three years via the Funding Circle marketplace. By welcoming larger investors to Funding Circle, we are able to help thousands more businesses to access finance. Victory Park will be lending to businesses via whole loans – you can read more about this here. Sachin Patel, our head of UK Capital Markets, discussed the news on CNBC and you can also read more by Peter Renton on LendAcademy.
And finally, the Financial Times reminds us of the UK’s domination over the European alternative finance market following a benchmarking report by Nesta. Andrew Hagger’s article in the Independent looks at how peer-to-peer lending is becoming more mainstream as we shape the way that finance is provided, creating an easier and quicker approach to lending and borrowing.