SIB Targets Alternative Lending Market with LendingCrowd Initiative
Scottish Enterprise has today announced that its investment arm, the Scottish Investment Bank (SIB), has agreed to provide funding of £2.75m to LendingCrowd, an innovative Edinburgh-based peer-to-peer lending platform which provides affordable loans to SMEs.
This is the first initiative to be delivered by SIB under its expanded remit and is expected to stimulate loans of up to £35m to Scottish SMEs, leveraging significant private sector investment and substantially increasing the supply of finance for a broad range of SMEs.
The agreement will allow SMEs to access loans of between £5k and £250k over terms ranging from six months to five years. Applicants will apply directly to LendingCrowd which will undertake the appropriate due diligence on each investment case and provide funding on commercial terms.
The move represents SIB’s first venture into the alternative funding market, as it seeks to increase and broaden the variety of funding available to SMEs in Scotland.
Commenting on the announcement, Kerry Sharp, head of the Scottish Investment Bank, said:
“We recognise that many Scottish companies continue to struggle to raise the funding they need to grow, and evidence points to substantial gaps in the supply and demand for finance within the Scottish market.
“Under our expanded remit, we are increasing the diversity of finance provision in Scotland, and this new initiative with LendingCrowd is the first example of how we are opening up innovative sources of alternative funding to Scottish SMEs.
“Peer-to-peer lending is one of the fastest growing areas of alternative finance and this initiative with LendingCrowd will increase competition in the marketplace and provide greater diversity and choice for Scottish SMEs.”
Stuart Lunn, CEO and co-founder of LendingCrowd, added: “Our groundbreaking agreement with Scottish Enterprise, one of the first initiatives of its kind in Europe, will help to fund the next stage of growth for some of Scotland's most exciting SMEs. This recognises the increasing importance of peer-to-peer access to finance and, in practical terms, will allow a significant number of small to medium-sized businesses the chance to pursue their ambitions to expand and compete in the UK and internationally.”
Alternative and innovative new sources of funding have emerged over recent years in response to changing market dynamics. The UK Alternative Finance sector provided £3.2bn worth of loans, investments and donations in 2015, up 84% compared to 2014.
Since launching in 2014, LendingCrowd has facilitated loans totalling over £7m and has over 2000 investors signed up to its platform. Deals range in size from £20,000 to over £1m, and in 2015 LendingCrowd helped Diet Chef complete one of the biggest ever peer-to-business deals seen in the UK in a £1.5m debt finance transaction.
Companies seeking to raise growth finance can access support to identify the most appropriate sources of finance for their needs, and help them to prepare to successfully secure finance from the SIB team of Financial Readiness specialists.
ENDS
LendingCrowd is Scotland’s only headquartered peer-to-peer lender which has established a strong market presence in relatively short period of time.
Companies can expect a flexible approach from LendingCrowd, with decisions made quickly following the application process. SMEs can access loans of £5k to £250k and the duration of loans can be six months to five years. Companies will also have the flexibility of repaying loans early. www.lendingcrowd.com
NOTES TO EDITORS
LENDING CROWD
Since launching in 2014, LendingCrowd has facilitated loans totalling over £7 million to scores of borrowers and has over 2,000 investors signed up to its platform. Deals range in size from £20,000 to over £1 million - in 2015 LendingCrowd helped Diet Chef complete one of the biggest ever peer-to-business deals seen in the UK in a £1.5 million debt finance transaction. LendingCrowd has recorded a marked increase in deal activity during Q3 and, partly in response to lower interest rate forecasts, the company is also experiencing a surge in investor interest in its platform in Scotland and across the UK.
CONTACT INFORMATION
Laura Suarez
Scottish Enterprise
0141 228 2726
07747 007256
laura.suarez@scotent.co.uk
The Scottish Investment Bank (SIB) is the investment arm of Scotland’s main economic development agency, Scottish Enterprise, operating Scotland-wide in partnership with Highlands and Islands Enterprise. It manages a suite of co- investment funds including the Scottish Co-investment Fund and the Scottish Venture Fund, which are partly funded by the European Regional Development Fund (ERDF). SIB also manages the Renewable Energy Investment Fund and the Scottish Recycling Fund. SIB is the cornerstone investor in the privately-managed Scottish Loan Fund, managed by Maven Capital Partners and an investor in Epidarex Capital’s life sciences fund. These investment funds support Scotland’s SME funding market to ensure businesses with growth and export potential have adequate access to growth capital. SIB also provides a team of financial readiness specialists to help companies prepare for new investment and access appropriate finance.