Scotland’s first Crowdlending platform nears the £1m mark

Scottish peer-to-business crowdfunding platform, LendingCrowd has seen an encouraging start to 2015 attracting investors to invest almost £1m into Scotland and UK-wide SMEs.

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The UK’s overall crowdfunding sector is predicted to top £4.4bn (Nesta) by the end of 2015 while 7000 SMEs have used crowdlending platforms to access loan finance in the UK.

Set up by entrepreneur Bill Dobbie and co-founder Stuart Lunn last autumn, LendingCrowd has already attracted a steady influx of Scottish and UK-wide investors and borrowers to the site – and has ambitious plans for 2015. These will include bringing to market ‘exciting new products’ for investors and borrowers through a lending website with even greater functionality.

So what is crowdfunding or crowdlending? In LendingCrowd’s case, the process enables businesses to access finance easily and quickly, from investors who have the potential to earn returns from *5.95% to 12.25%. By directly connecting people who want to lend to businesses, the Scottish crowdlending platform eliminates the costs and complexities of the banking world.

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 up to the thousands.

Stuart Lunn said the venture had built-in expert credit risk assessment and, unlike many 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 not just for those in Scotland – but also for the 4.9 million SMEs in the UK.”

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*As an Investor it’s important to remember you’re lending to businesses so your capital is at risk. Borrowers need to be mindful that defaulting might lead to the debt being passed to an agency for collection. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme. Investors can earn between *5.95% and 12.25% or more based upon LendingCrowd’s Credit Bands. Interest rates are guided by the credit grading allocated to each loan in which you choose to invest. Higher risk investments may yield greater returns but can also lead to lower returns if the business is not able to fully repay its debts. This is known as Bad Debt.


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