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Tech Nation, the UK government-backed organisation that selected LendingCrowd for its prestigious Upscale 4.0 programme, has revealed that the UK has created 13 new ‘unicorns’ – privately owned tech companies valued at more than $1 billion – over the past year.

This means that the UK ranks behind only the United States and China for the creation of fast-growing global tech companies.

Tech Nation’s report was published to coincide with the launch of London Tech Week. Since last year’s event, the number of unicorns across the UK has risen to 72.

We were delighted to contribute to the report, as we are the only Scottish company among 30 fast-growing start-ups selected to join Tech Nation’s Upscale 4.0 programme. Upscale is designed to help fast-growth tech companies to successfully navigate the challenges of growing to the next stage.

LendingCrowd founder and CEO Stuart Lunn said: “At LendingCrowd we are proud to be part of a burgeoning digital tech and fintech scene in Scotland. With a rich heritage of inventors, entrepreneurs and innovators Scotland has become a key hub for the UK digital tech sector, with Edinburgh being the largest UK fintech city outside of London.

“We announced a transformational funding deal to fuel SME growth across our platform with the government-backed Scottish Investment Bank and Dutch entrepreneurial bank NIBC, showing the belief in technology, diligence and people we have up here in Scotland.”

Eileen Burbidge, chair of Tech Nation, said: “There’s never been a better time to be working in the UK digital tech sector. We are really punching above our weight, as demonstrated by the fact that a third of Europe’s unicorns have been produced here and 30 per cent of future unicorns are also based in the UK. I am delighted to see that in addition to tech overall, in quite a few sub-sectors such as fintech we are already global leaders with more fast-growing unicorns than cities like New York, Shanghai and Beijing.

“I’m confident that we will be producing many more world-class fintech companies, uniting our country’s expertise in financial services and deep tech, along with world-leading digital tech companies across all categories.”

You can read the Tech Nation report in full on its website.

The post Celebrating the UK’s tech unicorns appeared first on LendingCrowd.

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Our Spring 2019 Cashback Offer ends on Friday 14 June. Join the promotion and you can earn a cashback award of between £50 and £350, depending on how much you invest. Terms apply. Capital at risk.

This offer is available to new and existing LendingCrowd investors who want to make their money work harder while helping us to fund the ambitions of successful and established British business from Inverness to Ilford.

Join the promotion and invest at least £5,000 before 23:59 on 14 June 2019 to receive your cashback:

Plus, you can earn an additional £50 bonus when you transfer any ISA of £10,000 and above from another provider to LendingCrowd.

With LendingCrowd, you can choose the account that best suits your investment approach. You can split your investment across more than one account.

Our Growth Account, which targets a return of 6%*, is aimed at investors who want a quick and simple method of creating a diversified portfolio of business loans. Investments are automatically diversified across the loans available on our platform.

Our Income Account, which targets a return of 5.6%*, is designed for those seeking to generate income from a lump sum without eating into their capital. Interest earned on loans can be withdraw free of charge while capital repayments reinvest automatically.

Our Self Select Account is for more sophisticated investors who have the time to hand-pick the businesses they want to lend to, making sure borrowers match their appetite for risk.

All of our accounts can be held within our Innovative Finance ISA (IFISA) for tax-free** returns. We were one of the first platforms to launch an IFISA and it’s easy to transfer an existing ISA to us. The minimum transfer value we accept is £1,000.

*Capital at risk. The target rate is variable, net of ongoing repayment fees, estimated bad debt and before the 1% capital withdrawal fee. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

**Tax treatment depends on the individual circumstances of each investor and may be subject to change in future.

The post Spring into action and earn up to £350 cashback appeared first on LendingCrowd.

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The UK’s financial regulator, the Financial Conduct Authority (FCA), today announced new rules for peer-to-peer (P2P) lending platforms.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “These changes are about enhancing protection for investors while allowing them to take up innovative investment opportunities. For P2P to continue to evolve sustainably, it is vital that investors receive the right level of protection.”

LendingCrowd, which has been fully authorised by the FCA since November 2016, supports these aims. The FCA’s new rules, which come into effect in December, will mean that investors who are new to the sector will not be able to invest more than 10% of their net investible assets in P2P agreements.

The P2P market has evolved rapidly since the first platform launched in 2005. In the UK, the sector has been overseen by the FCA since April 2014, when it took over the regulation of consumer credit from the former Office of Fair Trading. The FCA has already introduced clear rules aimed at safeguarding investors. For example, client money must be protected and platforms have to meet minimum capital standards. Resolution plans must also be in place to ensure that, if a platform collapsed, loan repayments would continue to be collected for investors.

Stuart Lunn, founder and CEO of LendingCrowd, said: “We are supportive of proposals to enhance investor protection. In anticipation of these outcomes we have already been working on making the necessary changes to our platform. Diversification is key to managing risk across an investment portfolio, so having no more than 10% in one asset class should not be seen as an onerous restriction.

“LendingCrowd is a responsible lender that has been built on a culture of protecting clients, both borrowers and investors, and we have been at the forefront of our industry when it comes to regulation. Platforms that have this underpinning should not be afraid of an appropriate level of oversight under an evolving regulatory landscape.”

Please remember that your capital is at risk when lending to businesses. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

The post LendingCrowd response to the FCA’s new platform rules appeared first on LendingCrowd.

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In the previous instalment of our Borrowing tookit, we highlighted how LendingCrowd can help to bridge the funding gap experienced by small businesses looking to borrow between £5,000 and £500,000. This time we look at the process of applying for a business loan with us.

The first step is to register as a borrower and then prepare the information you’ll need to support your application. Having an up-to-date business plan and projections will also help.

Once you have everything to hand, you can apply for a business loan with us in just 15 minutes.

What information will I need to provide?
  • Names, addresses and phone numbers for the business and all directors
  • How much you want to borrow and how you plan to invest these funds
  • Most recent three months’ business bank statements
  • Last two years’ full accounts
  • Management accounts to end of last completed quarter
  • VAT registration number (if applicable)
  • Legal status of business (for example, limited company, partnership, sole trader) and ownership
  • Number of years in business
  • Details of any other current borrowing, for example loans, overdrafts or factoring facilities
Writing a successful loan application

The information you provide acts as your application for credit and your pitch to your potential investors. This is your opportunity to share an engaging account of your business and how the loan would be used to fund your plans.

Make sure your application describes your business well – highlight its unique selling points and reflect your abilities and those of your management team. Remember that investors might not have lots of time and may know very little about your industry – so you can help by providing an easy-to-read introduction and reasons for investing in you.

We’ll go into more detail about the pitching process in the next addition to our Borrowing toolkit.

Adrian Innes, Head of Origination at LendingCrowd, said: “We were founded to help bridge the funding gap facing so many SMEs. Thanks to our recent £18.75 million deal with Scottish Investment Bank and NIBC, we stand ready and able to support many more borrowers who want to fund their ambitions with a fast and flexible LendingCrowd business loan.”

It’s time to take your business further. It’s time to Think Outside The Bank.

As a borrower, it’s important to remember that defaulting might lead to the debt being passed to any agency for collection. Investors need to be mindful that they’re lending to businesses so their capital is at risk. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

The post Applying for a business loan appeared first on LendingCrowd.

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Small and medium-sized enterprises (SMEs) make up more than 99% of the business population and account for some 60% of all private sector employment. However, they continue to struggle to secure the business finance they need to grow.

Some 90% of the market for loans to small businesses is controlled by a handful of large banks. Evidence shows that, if their bank rejects their application for a business loan, many SMEs simply give up the search for financing rather than seek alternative options.

Adrian Innes, Head of Origination at LendingCrowd, said: “Unfortunately, many SMEs remain unaware of the wide range of funding sources available to them.”

Fintech lending

One of those alternatives is fintech marketplace lending. This form of finance, sometimes called peer-to-peer (P2P) lending, was created in the UK, which remains at the forefront of developments. The UK accounts for about 77% of all European Union fintech lending volumes. Only China and the USA have larger markets.

Another source of funding is invoice finance, where a provider advances a percentage – for example 85% – of the value of the invoice. The provider then pays the remainder – minus fees – when the invoice is paid. This can enable businesses to speed up their cashflow cycle, but invoice finance can be expensive.

Equity funding can be appropriate for those that are able to put a value on the business and willing to give up a share. Shareholders may want to exert influence on the business, which can cause friction. A combination of debt and equity may be a good compromise for those who do not want to give away too big a slice.

Funding growth

Adrian Innes said: “Small businesses have access to a wide range of funding sources. However, too many SMEs think that their bank is their first and only port of call. According to the Federation of Small Businesses, just 24% of SMEs feel that credit is readily available.

“LendingCrowd has just announced an £18.75 million deal with Scottish Investment Bank and NIBC to fund SME growth. We are targeting a significant uplift in our lending, so we would encourage anyone seeking a business loan to contact us and find out how we can fund their ambitions.”

By connecting investors with SMEs seeking funding, LendingCrowd can offer loans from £5,000 to £500,000. Loan terms range from six months to five years, and borrowers can repay their loan early without charge. On average, a borrower can have the funds in their account less than 10 days after submitting their initial application.

Find out more about applying for a LendingCrowd business loan.

The post What are your options for business finance? appeared first on LendingCrowd.

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You may have seen the news about our £18.75 million funding deal with Scottish Investment Bank (SIB) and NIBC to help fund the ambitions of small and medium-sized business across Britain. Here we answer some questions about this unique partnership.

Which loans will SIB and NIBC invest in?  

We have used our proprietary technology to randomly select the loans in which SIB and NIBC will invest. Rather than investing in loan parts, they will fund entire loans. As a result, the loans in which SIB and NIBC invest will not appear on our Loan Market.

Will SIB and NIBC be able to select loans?

No. Our platform will randomly and automatically allocate a proportion of loans for SIB and NIBC to invest in.

Will they receive a better return than other investors?

No. Under Financial Conduct Authority rules, we can’t offer preferential treatment to any investor. The rates that SIB and NIBC lend at will be consistent with the applicable Credit Band for each loan. This does not mean the rate will be the highest or lowest available within the applicable Credit Band. We credit assess every loan before our system randomly allocates which ones will be allocated to SIB and NIBC.

What if one of their loans falls into arrears?

Loans in which SIB and NIBC invest will follow the same default process as all our other loans.

Can I see which loans SIB and NIBC have invested in?

Just as other investors can’t see your portfolio, you won’t be able to identify the loans in which SIB and NIBC have invested. We will continue to make our full loan book available for download.

Does this mean there will be fewer loans to invest in?

No – our platform is growing rapidly. We are seeing record levels of demand for finance from businesses. This deal will enable us to support even more successful and established SMEs the length and breadth of the country. The recent launch of our AutoBalance feature also means that increasing numbers of loan parts will be available on our Loan Market.

Please remember that your capital is at risk when lending to businesses. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

If you have any other questions, please email us at investor@lendingcrowd.com or call 0345 564 1600.

The post Scottish Investment Bank and NIBC deal – FAQs appeared first on LendingCrowd.

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LendingCrowd, Scotland’s only fintech lending platform, has brought together the government-backed Scottish Investment Bank (SIB) – the investment arm of Scottish Enterprise – and Dutch entrepreneurial bank NIBC to form a unique funding deal to provide small and medium-sized businesses with the finances they need to grow.

NIBC and SIB have agreed to lend a combined £18.75 million across LendingCrowd’s platform, with NIBC providing the senior debt for the deal with additional funding from SIB facilitating the overall debt package. This is the second lending deal that the platform has agreed with SIB, the first being the £2.75 million commitment it made in October 2016.

The funding will be made available as business loans to SMEs across Scotland and the rest of Britain, with LendingCrowd fulfilling the increasing demand for small business finance. LendingCrowd will be marketing these funds to British businesses, assessing applications and distributing the finance via its leading edge proprietary online platform, which can provide SMEs with a decision in the same day and access to the funds within 10 days. Businesses from Dundee to Dorset have benefitted from loans of up to £500,000.

This new investment comes after LendingCrowd was selected this year by government-backed Tech Nation for its Upscale 4.0 programme for high-growth UK tech companies. 

LendingCrowd provides funding to almost all sectors, and a few of the companies to have benefitted from the platform’s loans include Summerhall Distillery, producer of Pickering’s Gin, Tag Games and Umega Lettings.

Stuart Lunn, founder and CEO of LendingCrowd, commented: “We’ve had a record number of requests for funding from British businesses so far this year, showing that the appetite for alternative sources of finance to fund their ambitions only seems to be getting stronger.  

“We are delighted that the Scottish Investment Bank has followed up its first foray into the alternative investment market with this further commitment, and that we have been joined by NIBC, which sees the potential of LendingCrowd and our proven ability to distribute its considerable funding to UK businesses. Going through the due diligence on a deal like this has really shown the strength of our team in building an institutional class lending business.

“There are many small businesses crying out for finance and the funding from SIB and NIBC, coupled with our strong retail investor base, will allow LendingCrowd to help even more companies fulfil their ambitions.”

Kerry Sharp, Director of the Scottish Investment Bank, said: “We are delighted to provide the loan funding to LendingCrowd, Scotland’s marketplace lender, in order to support the substantial funding from NIBC, thereby continuing our efforts to stimulate the Scottish market for alternative and innovative forms of finance.  Having worked with LendingCrowd since 2016, we are delighted they have successfully grown their alternative funding operations to attract significant international funding, increasing and broadening the supply of capital to our SMEs – a great example of SIB’s wide and varied role in enhancing Scotland’s access to finance.”

Nils Schaffner, Head of FinTech and Structured Finance UK, NIBC Bank, added: “NIBC Bank has partnered with Fintech companies across our core geographies, including Iwoca, Ebury, and OakNorth in the UK, and we are delighted to support LendingCrowd in their growth ambition. We look forward to working together and seeing LendingCrowd continuing to make a real impact for SMEs seeking funding to realise their goals.”

The post LendingCrowd creates transformational deal to partner with Scottish Investment Bank and NIBC to fund SME growth appeared first on LendingCrowd.

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A decade on from the financial crisis, many small and medium-sized enterprises (SMEs) continue to struggle to secure the business loans they need to grow. SMEs are the powerhouse of the British economy, making up more than 99% of the business population and accounting for some 60% of all private sector employment.

Despite their importance to the economy, just 24% of business owners feel that credit is readily available, according to the Federation of Small Businesses.

HM Treasury has acknowledged that SMEs tend to approach their main bank when seeking a business loan “and that, if rejected, many simply give up rather than seek alternative options”.

Alternative sources of funding are available. Fintech lending platforms such as LendingCrowd enable investors to combine their resources and lend directly to small businesses, speeding up the financing process and helping to bridge the SME funding gap.

LendingCrowd, which launched in 2014, offers fast and flexible business loans from £5,000 to £500,000 for every type of small business – including sole traders, partnerships and limited companies. Loans can be for any business purpose, except for property development or property investment. To be eligible, your business must have been trading for at least two years and have a turnover of at least £100,000 a year.

Funding ambitions

Adrian Innes, our Head of Origination, said: “LendingCrowd was created to fund the ambitions of small businesses that have been let down by a market that is dominated by a handful of large banks. We combine cutting-edge technology with decades of experience across our team to provide SMEs with affordable business loans that will help them to develop and grow.

“A quarter of respondents to a survey of LendingCrowd borrowers said they believed that they would have been very unlikely to obtain funding if we didn’t exist. A failure to secure funds from elsewhere would have had a negative impact on employment and investment in the business. LendingCrowd helps to create opportunities, jobs and futures.”

Once our expert Credit Team approves your loan application, they will allocate it with a Credit Band from A+ to C+ and we will place your loan on our marketplace once we have all the information we need. Investors then compete to finance your business loan, bidding in our loan auction to invest in you and your plans.

In our next blog post, we’ll go into more detail about applying for a business loan through our innovative online platform. It takes just 15 minutes to apply and we aim to make a decision within 24 hours. Loan auctions typically last one or two days. Once you accept the loan terms and we have your completed paperwork, the funds could be in your account the same working day.

It’s time to take your business further. It’s time to Think Outside The Bank.

The post Get the business loan to fund your ambitions appeared first on LendingCrowd.

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In the latest edition of Financial Adviser, Neil Faulkner, CEO of peer-to-peer (P2P) research specialist 4th Way, considers the Financial Conduct Authority’s recent comment that Innovative Finance ISAs are “generally high-risk” investments.

“To many risk-adverse individuals with savings, any amount of risk above bank savings is going to feel like high,” Neil writes. He adds that it’s never a good idea “to put all your money in one basket, whatever you are investing in.”

There’s no such thing as a risk-free investment and it’s important to remember that your capital is at risk when you lend to businesses. That’s why diversification – not putting all your money in one basket – is key to managing risk when investing.

We make it easy to instantly create a diversified portfolio of business loans with our Growth Account and Income Account, both of which can be held within our Innovative Finance ISA for tax-free returns. Please note that tax treatment depends on the individual circumstances of each investor and may be subject to change in future.

To help achieve an optimum level of diversification within our investors’ portfolios, this week we launched our AutoBalance and AutoQueue features for Growth and Income accounts. These features will work together to ensure that investors do not have too high a proportion of their funds in any one business loan.

In his Financial Adviser article, Neil goes on to explain the research that 4th Way – a valued partner of LendingCrowd – carries out on the loan books of P2P lending platforms. It’s a very informative article and you can read it in full here.

At LendingCrowd, we combine cutting-edge technology with extensive financial services experience to decide which businesses will be able to use our platform to raise funds. Between January 2016 and March 2019, we only paid out loans to 8% of borrower applications. Read more in our Investing toolkit.

LendingCrowd founder and CEO Stuart Lunn said: “LendingCrowd has been at the forefront of innovation in the fintech investing and lending space since we launched almost five years ago. Our proprietary technology, developed in-house at our Edinburgh headquarters, allowed us to become one of the first platforms to offer an Innovative Finance ISA and means we can develop and launch additional account features rapidly and efficiently.

“We believe that diversification will be a key element of future regulation and we are keen to be at the forefront of best practice.”

Please remember that your capital is at risk when lending to businesses. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

The post Risks and returns when investing appeared first on LendingCrowd.

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At LendingCrowd, we’re continually looking at ways to improve our platform and make investing with us as easy as possible.

In the third instalment of our investing toolkit, we explain two new account features that we’re launching to ensure that our investors in our Growth Account and Income Account achieve an optimum level of diversification within their portfolios.

Diversification – not putting all your eggs in one basket – is key to mitigating risk, so these features will ensure that investors do not have too much money invested in individual loans.

AutoBalance

We designed our AutoBalance feature to ensure that investors have the optimum proportion of funds invested in each loan. This proportion, known as exposure, depends on the value of an investor’s portfolio.

AutoBalance will be automatically enabled for all new and existing investors. It may involve selling holdings in the loans that investors are overly exposed to, and buying holdings where they have too little exposure.

To provide the greatest diversification possible, AutoBalance will reduce the maximum exposure to individual loans. Previously, investors in our Growth Account and Income Account had no more than 5% of their funds invested in any one loan. Our new exposure limits are as follows:

Portfolio valueMaximum target exposure
£5,000 and above0.5%
£2,000 to £4,9991%
£1,000 to £1,9992%
AutoQueue

To maintain these new exposure levels when investors add funds to their accounts, our platform now has the ability to use the new AutoQueue feature. If a portfolio is already at its target exposure, cash may be “queued” to automatically invest in more loans as they become available on our Loan Market.

AutoQueue, working seamlessly with our AutoBalance feature, will ensure that investors do not have too high a proportion of their funds in any one loan.

LendingCrowd founder and CEO Stuart Lunn said: “LendingCrowd has been at the forefront of innovation in the fintech investing and lending space since we launched almost five years ago. Our proprietary technology, developed in-house at our Edinburgh headquarters, allowed us to become one of the first platforms to offer an Innovative Finance ISA and means we are able to develop and launch additional account features rapidly and efficiently. These enhancements will help our platform manage risk and diversification even better for our investor community.”

Find out more about AutoBalance and AutoQueue in our FAQs.

Please remember that your capital is at risk when lending to businesses. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

The post A balanced approach to diversification appeared first on LendingCrowd.

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